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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 1-4698
NEVADA POWER COMPANY
(Exact name of registrant as specified in its charter)
Nevada 88-0045330
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6226 West Sahara Avenue 89102
Las Vegas, Nevada (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (702) 367-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
-------------------------- -----------------------
Common Stock, $1 Par Value New York Stock Exchange
Pacific Stock Exchange
Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Cumulative Preferred Stock, $20 Par Value, 5.40% Series
(Title of class)
Cumulative Preferred Stock, $20 Par Value, 5.20% Series
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
47,453,382 shares of Common Stock were outstanding as of March 20, 1996.
The aggregate market value of Common Stock, which is the only voting
stock, held by non-affiliates as of March 20, 1996, was $1,032,111,059.
(Computed by reference to the closing price on March 20, 1996, as reported by
the Wall Street Journal as New York Stock Exchange Composite Transactions.)
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Shareholders for the
year ended December 31, 1995 are incorporated by reference into Parts II and IV
hereof.
(2) Portions of the Registrant's definitive Proxy Statement dated March
13, 1996 for the Company's annual meeting of shareholders on May 10, 1996, are
incorporated by reference into Part III hereof.
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TABLE OF CONTENTS
Page
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PART I
Item 1. Business ...................................... 1
Item 2. Properties .................................... 7
Item 3. Legal Proceedings ............................. 8
Item 4. Submission of Matters to a Vote of Security
Holders........................................ 9
Supplemental Item.
Executive Officers of Registrant .............. 9
PART II
Item 5. Market for the Registrant's Common Stock and
Related Security Holder Matters ............... 10
Item 6. Selected Financial Data ....................... 10
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operation... 10
Item 8. Financial Statements and Supplementary Data ... 10
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ........ 11
PART III
Item 10. Directors and Executive Officers of the
Registrant .................................... 11
Item 11. Executive Compensation ........................ 11
Item 12. Security Ownership of Certain Beneficial Owners
and Management ................................ 11
Item 13. Certain Relationships and Related Transactions. 11
PART IV
Item 14. Exhibits, Financial Statement Schedule, and
Reports on Form 8-K ........................... 12
SIGNATURES ............................................. 23
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PART I
ITEM 1. BUSINESS
THE COMPANY
Nevada Power Company (Company), incorporated in 1929 under the laws of
Nevada, is an operating public utility engaged in the electric utility business
in the City of Las Vegas and vicinity in southern Nevada. Most of the Company's
operations are conducted in Clark County, Nevada (with an estimated service
area population of 1,142,000 at December 31, 1995) where the Company furnishes
electric service in the communities of Las Vegas, North Las Vegas, Henderson,
Searchlight, Laughlin and adjoining areas and to Nellis Air Force Base (a
permanent military installation northeast of Las Vegas and the USAF Tactical
Fighter Weapons Center). Electric service is also supplied to the Department of
Energy at Mercury and Jackass Flats in Nye County, where the Nevada Test Site
is located.
SOURCES OF ELECTRIC ENERGY SUPPLY
The electric energy obtained from the Company's own generating facilities
will be produced at the following plants:
Number Net Capacity
Plant of Units (Megawatts)
----- -------- ------------
Coal Fuel:
Reid Gardner (Steam).............. 3 330
Reid Gardner Unit No. 4 (Steam)... 1 275(1)
Mohave (Steam).................... 2 196(2)
Navajo (Steam).................... 3 255(3)
Natural Gas and Oil Fuel:
Clark (Steam)..................... 3 181
Clark (Gas Turbine)............... 1 50
Clark (Combined Cycle)............ 2 466
Sunrise (Steam)................... 1 80
Sunrise (Gas Turbine)............. 1 69
Harry Allen (Gas Turbine)......... 1 72
-----
1,974
=====
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(1) This represents 25 megawatts of base load capacity, 235 megawatts of
peaking capacity and 15 megawatts (MW) upgrade capacity accomplished in
1990. Reid Gardner Unit No. 4, placed in service July 25, 1983, is a
coal-fired unit which is owned 32.2% by the Company and 67.8% by the
Department of Water Resources of the State of California. The Company is
entitled to use 100% of the unit's capacity for 1,500 hours each year
except the Company has agreed to reduce its allocation of peaking
capacity by 20 MW from 1993 through 1997. The Company is entitled to
9.6% of the first 260 megawatts of capacity and associated energy and is
entitled to all the 15 megawatt upgrade. Beginning in 1998, the Company
has options for the use of increasing amounts of energy from the unit so
that the Company may be entitled to use all of the unit's output 15 years
from that date. The 2000 option for 10.17 MW was not exercised by the
Company and has expired.
(2) This represents the Company's 14% undivided interest in the Mohave
Generating Station as tenant in common without right of partition with
three other non-affiliated utilities, less operating restrictions.
(3) This represents the Company's 11.3% undivided interest in the Navajo
Generating Station as tenant in common without right of partition with
five other non-affiliated utilities.
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The Company purchases Hoover Dam power pursuant to a contract with the
State of Nevada which became effective June 1, 1987 and will continue through
September 30, 2017. The Company's allocation of capacity is 235 MW.
The peak electric demand experienced by the Company was 3,066 megawatts on
July 28, 1995. This demand plus a reserve margin was served by a combination
of Company owned generation, and firm and short-term power purchases.
For 1996, the Company has contracts to purchase power from an independent
power producer (IPP) and four qualifying facilities (QF) (also known as
cogenerators) as follows:
Contract Term Net Capacity
--------------------
From To (Megawatts)
-------- -------- ------------
Independent Power Producer:
---------------------------
Nevada Sun-Peak Limited
Partnership ............. 06/08/91 05/31/16 210
Qualifying Facilities:
----------------------
Saguaro Power Company .... 10/17/91 04/30/22 90
Nevada Cogeneration
Associates #1 ........... 06/18/92 04/30/23 85
Nevada Cogeneration
Associates #2 ........... 02/01/93 04/30/23 85
Las Vegas Cogeneration
Limited Partnership ..... 06/01/94 05/31/24 45
---
515
===
The Company has total generating capacity of 2,724 megawatts, including
235 megawatts of Hoover Dam power, 210 megawatts of IPP power and 305 megawatts
of QF power. This along with agreements with other suppliers to purchase 675
megawatts of firm capacity and associated energy, for the summer of 1996, will
not be sufficient to meet the 1996 anticipated peak load demand and reserve
margin needs. Accordingly, the Company is utilizing a competitive bidding
process to obtain resources from other suppliers for additional firm capacity
and associated energy to meet the projected peak needs for 1996.
FUEL SUPPLIES
The fuels used to provide energy for the Company's generating facilities
are coal, natural gas and oil. Its other sources of electricity are
hydroelectric (Hoover Dam) and purchased power.
The Company's primary fuel source for generation is coal. The following
table shows the actual sources of fuel for generation for 1995 and anticipated
sources of fuel for generation in 1996 and 1997.
1995 1996 1997
---- ---- ----
Coal........................ 77% 72% 67%
Natural Gas................. 23 28 33
--- --- ---
100% 100% 100%
=== === ===
The Company's average delivered cost per ton of coal burned was as
follows: 1993 - $34.43; 1994 - $32.96; 1995 - $30.37.
Coal for both the Mohave and Navajo Stations is obtained from surface
mining operations conducted by Peabody Coal Company (Peabody) on portions of
the Black Mesa in Arizona within the Navajo and Hopi Indian reservations. The
supply contracts with Peabody extend to December 31, 2005 for Mohave and to
June 1, 2011 for Navajo, each contract having an option to extend for an
additional 15 years.
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Partial requirements for coal at the Reid Gardner Generating Station are
presently under contract through the year 2007. Although the Company can not
predict how the coal market may fluctuate in the future, the Company
anticipates no major difficulties in purchasing the remainder of its coal
requirements based upon current coal market conditions in the Western United
States. All coal for Reid Gardner presently comes from underground mines in
Utah and Colorado.
The Company's natural gas supply is subject to curtailment due to limited
pipeline capacity, until May, 1997, when a pipeline expansion project with
Southwest Gas Corporation is completed. All the Company's plants using natural
gas also have the capability of burning oil on a sustained basis.
CONSTRUCTION AND FINANCING PROGRAMS
The Company carries on a continuing program to extend and enlarge its
facilities to meet current and future loads on its system. Gross plant
additions and retirements for the five years ended December 31, 1995 amounted
to $966,646,000 and $63,830,000, respectively.
Excluding Allowance for Funds Used During Construction, the Company's
actual construction expenditures for 1995 were $176 million, and currently
estimated construction expenditures for 1996 and 1997 are $186 million and $195
million, respectively.
The Company's construction program and estimated expenditures are subject
to continuing review and are revised from time to time due to various factors,
including the rate of load growth, escalation of construction costs,
availability of fuel types, changes in environmental regulations, adequacy of
rate relief and the Company's ability to raise necessary capital.
To meet capital expenditure requirements through 1997, the Company will
utilize internally generated cash, the proceeds from industrial development
revenue bonds (IDBs), first mortgage bonds (FMBs), preferred securities and
common stock issues through public offerings and the Stock Purchase and
Dividend Reinvestment Plan (SPP).
The Company has the option of issuing new shares or using open market
purchases of its common stock to meet the requirements of the SPP. The Company
issued 1,577,977 shares of its common stock in 1995 under the SPP. At the end
of 1995, common equity represented 47.6% of total capitalization.
On May 19, 1995, the Company sold $85 million 7.06% Series AA FMBs due
2000 through a public offering. Net proceeds from the sale of the bonds were
used to repay approximately $70 million of indebtedness under the Company's
bank revolving credit facility, which was incurred for the purposes of repaying
the Company's $50 million 6.92% Series U FMBs due 1995 and funding a portion of
the Company's construction program. The remaining net proceeds of the Series
AA FMBs were used in connection with the Company's construction program and for
general corporate purposes.
On October 12, 1995, Clark County, Nevada issued $226.05 million in
floating rate revenue bonds (Nevada Power Company Project) consisting of $76.75
million Series 1995A IDBs due 2030, $85 million Series 1995B refunding IDBs due
2030, $44 million Series 1995C refunding IDBs due 2030 and $20.3 million Series
1995D refunding pollution control revenue bonds (PCRBs) with $14 million due
2011 and $6.3 million due 2023. Net proceeds from the sale of the Series 1995A
IDBs were placed on deposit with a trustee and will be used to finance the
construction of certain facilities which qualify for tax-exempt financing. At
December 31, 1995, $77.5 million remained on deposit with the trustee. Net
proceeds from the sale of the refunding bonds were used for the redemption of
the $44 million floating rate IDBs due 2015, $25 million floating rate IDBs due
2018, $60 million floating rate IDBs due 2019, $14 million 6 3/8% PCRBs due
2004 and $6.3 million 6 3/4% Series O FMBs due 2007 along with the related
PCRBs during the last four months of 1995. In addition, on October 12, 1995,
Coconino County, Arizona issued $13 million Series 1995E floating rate
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refunding PCRBs (Nevada Power Company Project) due 2022 to redeem the $13
million 7 1/8% Series N FMBs due 2006 along with the related PCRBs in November
1995.
The Indenture under which the Company's first mortgage bonds are issued
provides that no additional bonds may be issued unless earnings as defined
equal at least two and one-half times the interest requirements on all bonds to
be outstanding after the new issue. Based on its earnings through December 31,
1995 and assuming an 8 percent interest rate on new bonds, the Company would be
able to issue approximately $434 million of additional first mortgage bonds.
The Company's ability to issue additional debt is also limited by the need to
maintain a reasonable ratio of debt to equity.
The Company's ability to sell additional preferred stock is limited by the
necessity to meet required dividend coverages. At December 31, 1995, the
applicable dividend coverage test would permit the issuance of $371 million of
additional preferred stock at a dividend rate of 8 percent.
RESOURCE PLANNING
The Company's rate of customer growth, especially in recent years, has
been among the highest in the nation. The annual customer growth rate was 6.0
percent, 6.0 percent, and 5.4 percent in 1995, 1994 and 1993, respectively.
The peak demand for electricity by the Company's customers increased from
2,920 megawatts in 1994 to 3,066 megawatts in 1995. The Company's 1995 energy
sales reached 12,109,355 megawatthours, an increase of 1.4 percent over 1994.
Pursuant to Nevada law, every three years the Company files with the
Public Service Commission of Nevada (PSC) a forecast of electricity demands for
the next 20 years and the Company's plans to meet those demands. Among the
major items in the Company's 1994 Resource Plan, as refiled and amended, which
were approved by the PSC in 1994 and 1995 are the following:
(1) the Company will continue to pursue a strategy of relying upon short-
term power purchases to meet the forecasted increases in load;
(2) the Company will maintain sufficient flexibility to implement an
efficient cost-effective resource acquisition process where
appropriate, noting that the competitive solicitation process remains
the preferred method for comparing resource options;
(3) the Company will proceed with the installation of the initial 230 kV
circuit and associated substation and communication facilities on the
previously approved Arden-Northwest 230 kV Transmission Line;
(4) the Company will proceed with the rerouting of a portion of the #2
Arden-McCullough 230 kV Transmission Line;
(5) the Company will proceed with limited resource planning approval to
seek the necessary UEPA and other permitting approvals, and to
acquire necessary sites and rights-of-way for two 230 kV switching
stations;
(6) the Company will proceed with a Renewable Energy Program for the
Company to utilize all appropriate incentives, resources, and
expertise to foster the development of economically competitive
renewable energy systems with the intent to provide Southern Nevada
customers with 20 megawatts of solar-generated electricity by the
year 2002.
The Company will file a status report along with any significant
modifications to the Resource Plan by April 1, 1996 regarding the outcome of
three energy service company contracts and the results of transmission studies
currently being performed.
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REGULATION AND RATES
The Company is subject to regulation by the PSC which has regulatory
powers with respect to rates, facilities, services, reports, issuance of
securities and other matters.
Following is a summary of the rate increases and decreases that have been
granted the Company during the past three years.
Amount in
Effective Millions
Date Nature of Increase (Decrease) of Dollars
------------- ----------------------------- ----------
June 28, 1993 Energy and resource plan
net rate increase 42.1
February 1, 1994 Energy rate increase 23.6
October 1, 1994 General rate decrease (6.3)
October 1, 1995 Energy rate decrease (20.1)
December 1, 1995 Energy and resource plan
net rate decrease (17.6)
All amounts are on an annual basis.
On July 17, 1995, the Company filed a request with the PSC to decrease
energy rates by $20.1 million under the state's deferred energy accounting
procedures. On September 28, 1995, the PSC approved the rate decrease which
took effect October 1, 1995. Residential rates were reduced by $1.9 million
and other customers received the remaining $18.2 million reduction. On November
27, 1995, the PSC granted an additional deferred energy rate decrease of
approximately $17.1 million and a resource plan cost recovery decrease of
$500,000 which took effect December 1, 1995 and resulted in a $7.6 million
reduction in residential rates with the remaining $10 million reduction going
to other customer classes. The new energy rates will more closely reflect the
cost of providing service to each of the customer classes.
Hearings on the last phase of the 1995 deferred energy case began on March
11, 1996 and will consider the prudency of the Company's fuel and purchased
power expenditures during the period June 1993 to May 1995, a buyout of a coal
supply agreement and a credit to customers related to use of coal reserves in
an unregulated subsidiary company. The PSC Staff and Consumer Advocate Office
have filed testimony seeking disallowance from recovery and credit to the
Company's customers of approximately $19 million. The Company believes its
expenditures and use of coal reserves are prudent and reasonable and will
vigorously defend against the proposed disallowances.
As permitted by state statute, the Company defers differences between the
current cost of fuel and purchased power, and base energy costs as defined.
Under regulations adopted by the PSC, the balance in the deferred energy
account at the end of twelve months should be cleared, over a subsequent
period. Recovery of increased costs is permitted to the extent that the Company
has not realized its authorized overall rate of return. If the Company has
exceeded the authorized rate of return, the portion of deferred energy costs
represented in such excess is transferred to the next deferred energy recovery
period. The energy costs deferred are included as a current item in determining
taxable income for federal income tax purposes. However, for financial
statement purposes, the federal income tax effect is deferred and amortized to
income as the deferred energy account is cleared. PSC regulations allow the
fuel base portion of the Company's general rates to be changed at the time of a
hearing to clear the balance in the deferred energy account. This permits the
recovery of fuel expenses on a deferred basis, but, recovery will have no
effect on the Company's earnings.
The Company is allowed to recover on an annual basis the costs of
developing its 20-year resource plan. Also, by an order of the PSC in June
1988, the Company is allowed to capitalize certain costs associated with
Commission approved conservation programs.
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ENVIRONMENTAL MATTERS
The Company is subject to regulation by federal, state and local
authorities with regard to air and water quality control and other
environmental matters.
Environmental expenditures made by the Company are currently being
recovered through customer rates. Management believes environmental
expenditures will increase over time and the increased costs will also be
recovered as necessary utility expenses. The following is a discussion of
pending environmental matters:
The Federal Clean Air Act Amendments of 1990 (Amendments) include
provisions for reduction of emissions of oxides of nitrogen by establishing new
emission limits for coal-fired generating units. This will require the
installation of additional pollution-control technology at some of the Reid
Gardner Station generating units before 2000 at an estimated cost to the
Company of no more than $6 million.
The Amendments also mandated creation of the Grand Canyon Visibility
Transport Commission to work toward the goal of visibility improvement in the
Grand Canyon and other national parks of the Colorado Plateau. The Commission
is expected to make recommendations to the U.S. Environmental Protection Agency
(EPA) by May 1996, regarding ways to improve visibility. A variety of actions
could be considered including imposition of more pollution controls or
emissions limitations upon large sources of pollution in the West and
Southwest. The potential affect on the Company cannot be determined at this
time.
Related to visibility, the United States Congress authorized the EPA to
study the potential impact of the Mohave Generating Station (Mohave) on
visibility in the Grand Canyon area. Results of this study are expected in
1996. The cost of any required improvements cannot be determined at this time.
The Nevada Division of Environmental Protections (NDEP) had imposed more
stringent interim stack opacity limits for Mohave. In December, at the
recommendation of NDEP, the Nevada Environmental Commission elected to retain
the interim limit as a permanent rule. Compliance with the interim rule has
been maintained since a limit more stringent than the interim standard has not
been imposed. As such, the owners of Mohave, including Nevada Power at 14%,
will not be required to fund any additional improvements related to opacity.
In 1991, the EPA published an order requiring the Navajo Generating
Station (Navajo) to install scrubbers to remove 90 percent of sulfur dioxide
emissions beginning in 1997. As an 11.3 percent owner of Navajo, the Company
will be required to fund an estimated $56.5 million for installation of the
scrubbers. In 1992, the Company received resource planning approval from the
PSC for its share of the cost of the scrubbers. The scrubbers are currently
under construction.
COMPETITION
Restructuring of the electric utility industry is accelerating with the
enactment of the National Energy Policy Act of 1992 (Act). Restructuring will
lead to further competition in the industry as generators of power obtain
greater access to transmission facilities linking them to potential new
wholesale customers. Most observers believe the electric utility beneficiaries
of the Act will be twofold: those who can provide low cost generation for sale
and those who have strategically located transmission highways that can
transmit low cost power from one area to another.
Within the region the Company's residential rates are competitive.
However, even though the bulk of the 1995 energy rate decreases was allocated
to large customers, large industrial customer rates will require further
adjustment to remain competitive in the changing environment. In January 1996,
Mirage Resorts, owner of The Mirage and Treasure Island hotels, received
approval from the Clark County, Nevada Commission for a zone
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variance to build a 27 megawatt cogeneration plant to supply power to its
properties. The above event and the decision by the U.S. Department of Energy
in November 1995 to choose Valley Electric Association, a non-generating
utility supplier, as the primary electric power provider for the Nevada Test
Site (NTS) indicate the need for the Company to be able to offer more
competitive prices as an incentive for large customers to retain the Company as
their primary electric service provider. The Company will continue to be the
primary electric power provider for the NTS pending legal appeal. In
recognition of the changing regional competitive environment, the Company is
focusing on the costs of serving various classes of customers and the
appropriate rates to be charged based on those costs of service. The Company
has continued to seek any rate adjustments through the PSC necessary to
maintain a competitive position.
An opportunity exists given the Company's strategic location in the center
of a region of price diversity. As generators arrange for sales of electricity
to customers in other areas, much of the power may need to be transmitted
through the Company's service territory. The Company would have an opportunity
to charge generators for the transmission of energy through its system. The
Company is studying the feasibility of constructing additional cost-effective
transmission facilities to maximize the advantage of its strategic location.
In September 1995 the PSC opened a docket to examine electric industry
restructuring issues. The PSC is soliciting opinions and analyses concerning
the potential implications of competition for various products and services
within the electric industry. The new docket is intended to supplement the
subcommittee established by the Nevada Legislature during the 1995 legislative
session to study the effects of competition in the generation, sale and
transmission of electric energy. The legislative subcommittee is expected to
make a recommendation to the Nevada Legislature in August of 1996 so the
recommendation can be reviewed before the start of the 1997 legislative
session. The PSC expects to issue a final report based on the information
obtained in the new docket in June of 1996. Both the report and the information
gathered in the new docket will be shared with the legislative subcommittee.
EMPLOYEES
The Company had 1,761 employees at December 31, 1995.
ITEM 2. PROPERTIES
The Company's generating facilities are described under "Item 1. Business,
Sources of Electric Energy Supply".
The Company shares ownership in a 59-mile, 500 kilovolt line and two 15-
mile, 230 kilovolt lines that transmit power from the Mohave Generating Station
near Davis Dam on the Colorado River via Eldorado Substation to Mead Substation
located near Boulder City, Nevada. The Company has 32 miles of 230 kilovolt
line from Mead Substation to Las Vegas. This line, together with two Company-
owned 230 kilovolt lines presently connected to the Bureau of Reclamation lines
between Mead Substation and Henderson, Nevada, transmit the Mohave Generating
Station power to the Las Vegas area. A 25-mile, 230 kilovolt line between the
Mead Substation and the Company's Winterwood Substation was energized in 1988.
This line brings the additional Hoover energy to the Las Vegas Area and
increases the Company's interconnected transmission capabilities. The Company
shares ownership in 76 miles of 500 kilovolt transmission line from the Navajo
Generating Station to the Moenkopi Switchyard in Coconino County, Arizona (the
Southern Transmission System) and 274 miles of 500 kilovolt transmission line
from the Navajo Generating Station to the McCullough Substation in Clark
County, Nevada (the Western Transmission System). Power is transmitted from the
McCullough Substation to the Las Vegas area via three 230 kilovolt lines of 23
miles, 25 miles and 32 miles in length, respectively. The 25-mile line was
energized in May 1992. Two 230 kilovolt lines transmit power from the Reid
Gardner Station located near Glendale, Nevada. One is a 39 mile line to the
Pecos Substation and
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the other a 25 mile line to the Harry Allen Substation. In 1994, 20 miles of a
230 kilovolt line from the Harry Allen Substation to the Pecos Substation was
energized. One 39-mile, 230 kilovolt line transmits power from the Reid Gardner
Station located near Glendale, Nevada to the Pecos Substation near North Las
Vegas. A 7 mile, 230 kilovolt line between Westside and Decatur Substations,
both located in Las Vegas, was energized in 1991. In addition to the above, the
Company has 279 miles of 138 kilovolt and 484 miles of 69 kilovolt transmission
lines in service.
In 1990 the Company added a new transmission interconnection consisting of
a 345 kilovolt line from Harry Allen Substation in Southern Nevada to the
Nevada-Utah border where it connects with a PacifiCorp line to Red Butte
Substation in Southern Utah near the City of St. George and a 230 kilovolt line
from Harry Allen Substation to Westside Substation which is located in Las
Vegas. The Company owns the 50-mile, 230 kilovolt line and the 69 miles of the
345 kilovolt line from Harry Allen Substation to the Nevada-Utah border;
PacifiCorp owns the portion of the 345 kilovolt line from the Nevada-Utah
border to Red Butte Substation.
At December 31, 1995, the Company owned 105 transmission and distribution
substations with a total installed transformer capacity of 10,020,533 kilovolt-
amperes. In addition it co-owns with others the above mentioned Eldorado
Substation with installed transformer capacity of 1,000,000 kilovolt-amperes,
the McCullough Substation with installed transformer capacity of 1,250,000
kilovolt-amperes and the Reid Gardner Unit No. 4 Substation with installed
capacity of 318,000 kilovolt-amperes.
At Harry Allen Substation, the Company has a 336,000 kilovolt-ampere
transformer and two 336,000 kilovolt-ampere 345 kilovolt phase shifting
transformers which are used for necessary voltage transformations and to
control flows on the interconnection.
As of December 31, 1995, there were approximately 3,093 miles of pole line
together with approximately 6,908 cable miles of underground in the Company's
distribution system with a total installed distribution transformer capacity of
6,021,342 kilovolt-amperes.
ITEM 3. LEGAL PROCEEDINGS
Saguaro Power Company (Saguaro), a cogeneration power producer, and the
Company are parties to a 30-year power purchase contract (Contract) wherein the
Company agreed to purchase power from Saguaro's plant near Henderson, Nevada.
On July 22, 1995, Saguaro filed a lawsuit in District Court, Clark County,
Nevada, seeking damages and injunctive relief as a result of being curtailed in
its power deliveries during periods of low load conditions on the Company's
system. The lawsuit alleges that the Company refused to accept and pay for
approximately $2 million of electric energy and capacity, and that the Company
should reimburse Saguaro for $2 million related to the construction of the
interconnection line. Saguaro also alleges that the Company has refused to pay
Saguaro for excess capacity. Lastly, Saguaro alleges that the Company has
committed fraud and anticipatory breach of the Contract and requests punitive
damages of $75 million. The Company believes its actions are consistent with
the Contract, federal and state regulations, and state administrative
directives, and will vigorously defend against these claims. Further, the
Company contends it has paid Saguaro all amounts due it under the terms of the
Contract.
On September 1, 1995, Las Vegas Cogeneration Limited Partnership filed a
similar lawsuit to that of Saguaro; it seeks curtailment damages of less than
$200,000.
On July 24, 1995, Nevada Cogeneration Associates #1 (NCA 1) and Nevada
Cogeneration Associates #2 (NCA 2), also cogeneration power producers, made a
request for arbitration of their current contracts relative to the same issues
of low load condition curtailments and energy and capacity payments. They
alleged under payments by the Company of approximately $2.6 million.
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The Nevada District Court has recently denied the Company's request that
the issues regarding low load conditions and the lawsuits for curtailment
damages be heard before the PSC. The Nevada District Court ordered all the
parties to arbitrate the above issues with the exception of Saguaro's claim
concerning the interconnection line. The Company has appealed these decisions.
Arbitration with NCA 1 and NCA 2 proceeded as ordered and in January 1996,
the arbitrator entered an order denying most of NCA's claims. The order does
permit some damages based on the definition of a low load condition being at a
different megawatt level than either party had asserted. The Company estimates
the damages to be approximately $1 million.
The Company is involved in litigation arising in the normal course of
business. While the results of such litigation cannot be predicted with
certainty, management, based upon advice of counsel, believes that the final
outcome will not have a material adverse effect on the Company's financial
position and results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report, through the solicitation of
proxies or otherwise.
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF REGISTRANT
The Company's executive officers are as follows:
Age as of
Name December 31, 1995 Position
---- ----------------- --------
Charles A. Lenzie 58 Chairman of the Board and Chief
Executive Officer
David G. Barneby 50 Vice President, Power Delivery
Cynthia K. Gilliam 47 Vice President, Retail Customer
Operations
Richard L. Hinckley 40 Vice President, Secretary and
General Counsel
Steven W. Rigazio 41 Vice President, Finance and
Planning, Treasurer, Chief
Financial Officer
Gloria T. Banks Weddle 46 Vice President, Corporate Services
Each of the executive officers has been actively engaged in the business
of the Company for more than five years.
Charles A. Lenzie was elected Chairman of the Board and Chief Executive
Officer on May 1, 1989. Prior to that time he was President of the Company.
Due to the resignation of James C. Holcombe as President and Chief Operating
Officer on August 1, 1995, Mr. Lenzie was appointed President of the Company
effective August 10, 1995.
David G. Barneby was elected Vice President, Power Delivery effective
October 14, 1993. He joined the Company in 1965 as a Student Engineer and was
made a Junior Engineer in 1967. He was promoted to Superintendent of the Reid
Gardner Generating Station in 1976; Project Manager - Reid Gardner Unit 4 in
1979 and in 1985 appointed Manager - Generation Engineering and Construction.
He was elected Vice President - Generation in 1989. His title was changed to
Vice President - Power Supply later that year.
Cynthia K. Gilliam was elected Vice President, Retail Customer Operations
effective October 14, 1993. She joined the Company in 1974 as a Rate Analyst
and was promoted to Rates Administrator in 1979 and to Manager of Financial
Planning in 1983. In 1987, she
9
<PAGE>
was appointed Manager of Human Resource Planning. She was elected Vice
President - Personnel in 1988 and her title was changed to Vice President -
Human Resources in 1989. In 1992, she was elected Vice President - Customer
Service.
Richard L. Hinckley was elected Vice President, Secretary and General
Counsel on May 15, 1991. He joined the Company as Staff Counsel in 1985 and was
promoted to Assistant Secretary and Chief Counsel in 1989. Prior to joining the
Company, he served as Staff Attorney with the Nevada Public Service Commission
and as Assistant Attorney General in Utah.
Steven W. Rigazio was elected Vice President, Finance and Planning,
Treasurer, Chief Financial Officer effective October 14, 1993. He joined the
Company in 1984 as a Rates Administrator and was promoted to Supervisor of
Rates and Regulations in 1985, Manager of Rates and Regulatory Affairs in 1986,
Director of System Planning in 1990, Vice President - Planning in 1991 and Vice
President and Treasurer, Chief Financial Officer in 1992.
Gloria T. Banks Weddle was named Vice President, Corporate Services
effective January 1, 1996. She first joined the Company in 1973, was promoted
to Manager of Compensation and Benefits in 1988 and Director of Human Resources
in 1991. She was elected Vice President - Human Resources in 1992. On October
14, 1993, she was elected Vice President, Human Resources and Corporate
Services. Her title was changed to Vice President - Corporate Services in 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
Information with respect to the principal market for the Company's common
stock, securities exchange, shareholders of record, quarterly high and low
sales prices and quarterly dividend payments for 1995 and 1994 are hereby
incorporated by reference from page 44 of the Company's Annual Report to
Shareholders for the year ended December 31, 1995, which is filed herewith as
Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is hereby incorporated by reference
from page 45 of the Company's Annual Report to Shareholders for the year ended
December 31, 1995, which is filed herewith as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
The information required by Item 7 is hereby incorporated by reference
from pages 24 to 27 of the Company's Annual Report to Shareholders for the year
ended December 31, 1995, which are filed herewith as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements for the years ended December 31, 1995,
1994 and 1993 together with the auditors' report thereon required by Item 8 are
incorporated by reference from the following pages of the Company's Annual
Report to Shareholders for the year ended December 31, 1995, which are filed
herewith as Exhibit 13.
10
<PAGE>
Annual
Report
Page
------
Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993...................... 28
Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993...................... 29
Balance Sheets - December 31, 1995 and 1994............ 30-31
Schedules of Capitalization -
December 31, 1995 and 1994............................ 32
Schedules of Long-Term Debt -
December 31, 1995 and 1994............................ 33
Statements of Retained Earnings for the Years
Ended December 31, 1995, 1994 and 1993................ 34
Notes to Financial Statements.......................... 35-42
Independent Auditors' Report........................... 43
Report of Management................................... 43
See Note 11 of Notes to Financial Statements in the Company's Annual
Report to Shareholders for the unaudited selected quarterly financial data
required to be presented in this Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no Report on Form 8-K filed within the twenty-four months
prior to the date of the most recent financial statements, December 31, 1995,
reporting a change of accountants.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by Item 10 with respect to the Company's executive
officers is set forth in Part I, Item 4., under the preceding heading
"Supplemental Item. Executive Officers of Registrant". The other information
required by Item 10 is hereby incorporated by reference from the Company's
definitive Proxy Statement dated March 13, 1996 and heretofore filed with the
Securities and Exchange Commission (SEC). (See the heading therein "Election of
Directors".)
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is hereby incorporated by reference
from the Company's definitive Proxy Statement dated March 13, 1996 and
heretofore filed with the SEC. (See the heading therein "Executive
Compensation".)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is hereby incorporated by reference from
the Company's definitive Proxy Statement dated March 13, 1996 and heretofore
filed with the SEC. (See the heading therein "Security Ownership of
Management".)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Management of the Company has no knowledge of any transaction,
relationship or indebtedness which is required to be disclosed by Item 13.
11
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
The Company's financial statements for the years ended December 31, 1995,
1994 and 1993 together with the auditors' report appearing on pages 28 to 43 of
Nevada Power Company's 1995 Annual Report to Shareholders are incorporated
herein by reference and filed as Exhibit 13.
FINANCIAL STATEMENT SCHEDULE FOR THE
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 PAGE
- -------------------------------------------- ----
Independent Auditors' Consent and Report on Schedule.............. 21
Schedule VIII - Valuation and Qualifying Accounts................. 22
All other schedules are omitted because they are not applicable, not
required, or because the information is included in the financial statements or
notes thereto.
EXHIBITS
FILED DESCRIPTION
- -------- -----------
3.4 Restated Bylaws, as amended March 9, 1995
4.2 Twenty-Sixth Supplemental Indenture dated May 1, 1995
13 Pages 24 to 45 of Nevada Power Company's Annual Report to
Shareholders for the Year Ended December 31, 1995
(incorporated by reference in Parts II and IV hereof)
10.75 Financing Agreement between Clark County, Nevada and
Nevada Power Company dated October 1, 1995 (Series 1995A)
10.76 Financing Agreement between Clark County, Nevada and
Nevada Power Company dated October 1, 1995 (Series 1995B)
10.77 Financing Agreement between Clark County, Nevada and
Nevada Power Company dated October 1, 1995 (Series 1995C)
10.78 Financing Agreement between Clark County, Nevada and
Nevada Power Company dated October 1, 1995 (Series 1995D)
10.79 Financing Agreement between Coconino County, Arizona
Pollution Control Corporation and Nevada Power Company
dated October 1, 1995 (Series 1995E)
10.80 Letter of Credit and Reimbursement Agreement dated as of
October 1, 1995 among Nevada Power Company, The Banks
Named Herein, and Societe Generale, Los Angeles Branch
10.81 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
23 Independent Auditors' Consent and Report on Schedule
27 Financial Data Schedule - December 31, 1995
12
<PAGE>
In addition to those Exhibits shown above, the Company hereby incorporates
the following Exhibits pursuant to Exchange Act Rule 12B-32 and Regulation
#201.24 by reference to the filings set forth below:
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
3.1 Restated Articles of Incorporation 3.8 to Form 10-K 1-4698
filed June 10, 1988 Year 1988
3.2 Amendment to Restated Articles of 4.7 to Form S-8 33-32372
Incorporation filed May 23, 1989
3.3 Amendment to Restated Articles of 4.8 to Form S-3 33-55698
Incorporation filed June 8, 1992
4.1 Certificate of Designation of Cumulative
Preferred Stock as follows:
5.40% Series 2.1 to Form S-1 2-16968
5.20% Series 2.1 to Form S-1 2-20618
4.70% Series 3.2 to Form 8-K 1-4698
July 1965
8% Series 2.1 to Form S-7 2-44513
8.70% Series 2.1 to Form S-7 2-49622
11.50% Series 2.1 to Form S-7 2-52238
9.75% Series 2.1 to Form S-7 2-56788
Auction Series A 4.6 to Form S-3 33-15554
Auction Series A as amended
November 14, 1991 4.9 to Form S-3 33-44460
Auction Series A as amended
December 12, 1991 4.1 to Form 10-K 1-4698
Year 1992
9.90% Series 4.1 to Form 10-K 1-4698
Year 1992
4.2 Indenture of Mortgage and Deed of 4.2 to Form S-1 2-10932
Trust Providing for First Mortgage
Bonds, dated October 1, 1953 and
Twenty-Five Supplemental Indentures
as follows:
First Supplemental Indenture, 4.2 to Form S-1 2-11440
dated August 1, 1954
Second Supplemental Indenture, 4.9 to Form S-1 2-12566
dated September 1, 1956
Third Supplemental Indenture, 4.13 to Form S-1 2-14949
dated May 1, 1959
Fourth Supplemental Indenture, 4.5 to Form S-1 2-16968
dated October 1, 1960
Fifth Supplemental Indenture, 4.6 to Form S-16 2-74929
dated December 1, 1961
Sixth Supplemental Indenture, 4.6A to Form S-1 2-21689
dated October 1, 1963
Seventh Supplemental Indenture, 4.6B to Form S-1 2-22560
dated August 1, 1964
Eighth Supplemental Indenture, 4.6C to Form S-9 2-28348
dated April 1, 1968
Ninth Supplemental Indenture, 4.6D to Form S-1 2-34588
dated October 1, 1969
Tenth Supplemental Indenture, 4.6E to Form S-7 2-38314
dated October 1, 1970
Eleventh Supplemental Indenture, 2.12 to Form S-7 2-45728
dated November 1, 1972
13
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
Twelfth Supplemental Indenture, 2.13 to Form S-7 2-52350
dated December 1, 1974
Thirteenth Supplemental 4.14 to Form S-16 2-74929
Indenture, dated October 1,
1976
Fourteenth Supplemental 4.15 to Form S-16 2-74929
Indenture, dated May 1, 1977
Fifteenth Supplemental 4.16 to Form S-16 2-74929
Indenture dated September 1,
1978
Sixteenth Supplemental Indenture, 4.17 to Form S-16 2-74929
dated December 1, 1981
Seventeenth Supplemental 4.2 to Form 10-K 1-4698
Indenture, dated August 1, 1982 Year 1982
Eighteenth Supplemental Indenture, 4.6 to Form S-3 33-9537
dated November 1, 1986
Nineteenth Supplemental Indenture, 4.2 to Form 10-K 1-4698
dated October 1, 1989 Year 1989
Twentieth Supplemental Indenture, 4.21 to Form S-3 33-53034
dated May 1, 1992
Twenty-First Supplemental 4.22 to Form S-3 33-53034
Indenture, dated June 1, 1992
Twenty-Second Supplemental 4.23 to Form S-3 33-53034
Indenture, dated June 1, 1992
Twenty-Third Supplemental 4.23 to Form S-3 33-53034
Indenture, dated October 1, 1992
Twenty-Fourth Supplemental 4.23 to Form S-3 33-53034
Indenture, dated October 1, 1992
Twenty-Fifth Supplemental 4.23 to Form S-3 33-53034
Indenture, dated January 1, 1993
4.3 Instrument of Further Assurance 4.8 to Form S-1 2-12566
dated April 1, 1956 to Indenture
of Mortgage and Deed of Trust
dated October 1, 1953
4.4 Rights Agreement dated October 15, 4.1 to Form 8-A 1-4698
1990 between Manufacturers Hanover Year 1990
Trust Company and Nevada Power
Company
10.1 Contract for Sale of Electrical 13.9A to Form S-1 2-10932
Energy between State of Nevada
and the Company, dated October
10, 1941
10.2 Amendment dated June 30, 1953 to 13.9A to Form S-1 2-10932
Exhibit 10.1
10.3 Contract for Sale of Electrical 13.10 to Form S-1 2-10932
Energy between State of Nevada
and the Company, dated June 1,
1951
10.4 Agreement dated November 10, 1948 13.18 to Form S-1 2-12697
between the Company and Lincoln
County Power District No. 1 and
Overton Power District No. 5
10.5 Agreement dated October 21, 1949 13.19 to Form S-9 2-12697
between the Company and Lincoln
County Power District No. 1 and
Overton Power District No. 5
14
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.6 Mohave Project Plant Site 13.27 to Form S-9 2-28348
Conveyance and Co-tenancy
Agreement dated May 29, 1967
between the Company and Salt
River Project Agricultural
Improvement and Power District
Southern California Edison
Company
10.7 Eldorado System Conveyance and 13.30 to Form S-9 2-28348
Co-tenancy Agreement dated
December 20, 1967 between the
Company and Salt River Project
Agricultural Improvement and
Power District and Southern
California Edison Company
10.8 Mohave Operating Agreement dated 13.26F to Form S-1 2-38314
July 6, 1970 between the Company,
Salt River Project Agricultural
Improvement and Power District,
Southern California Edison
Company and Department of Water
and Power of the City of Los
Angeles
10.9 Navajo Project Participation 13.27A to Form S-1 2-38314
Agreement dated September 30,
1969 between the Company, the
United States of America,
Arizona Public Service Company,
Department of Water and Power of
the City of Los Angeles, Salt
River Project Agricultural
Improvement and Power District
and Tucson Gas & Electric
Company
10.10 Navajo Project Coal Supply 13.27B to Form S-1 2-38314
Agreement dated June 1, 1970
between the Company, the United
States of America, Arizona
Public Service Company,
Department of Water and Power
of the City of Los Angeles,
Salt River Project Agricultural
District, Tucson Gas & Electric
Company and the Peabody Coal
Company
10.11 Contract dated January 1, 1968 13.32 to Form S-1 2-34588
between the Company and United
States Bureau of Reclamation for
interconnections at Mead Station
10.12 Note Agreement dated December 11, 5.35 to Form S-7 2-49622
1973 relating to $25,000,000
8-1/2% Promissory Notes due 1998
15
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.13 Reclaimed Wastewater Purchase 5.36 to Form S-7 2-52238
Agreement dated June 21, 1974
among City of Las Vegas, Nevada,
Clark County Sanitation District
No. 1, County of Clark, Nevada
and Nevada Power Company
10.14 Equipment Lease dated as of 5.37 to Form 8-K 1-4698
March 1, 1974 between Nevada Power April 1974
Company, Lessor, and Clark County,
Nevada, Lessee
10.15 Sublease Agreement dated as of 5.38 to Form 8-K 1-4698
March 1, 1974 between Clark April 1974
County, Nevada, Sublessor,
and Nevada Power Company,
Sublessee
10.16 Guaranty Agreement dated as of 5.39 to Form 8-K 1-4698
March 1, 1974 between Nevada April 1974
Power Company and Commerce
Union Bank as Trustee
10.17 Navajo Project Co-tenancy 5.31 to Form 8-K 1-4698
Agreement dated March 23, 1976 April 1974
between the Company, Arizona
Public Service Company,
Department of Water and
Power of the City of Los Angeles,
Salt River Project Agricultural
Improvement and Power District,
Tucson Gas & Electric Company
and the United States of America
10.18 Amended Mohave Project Coal Supply 5.35 to Form S-7 2-56356
Agreement dated May 26, 1976
between the Company and Southern
California Edison Company,
Department of Water and Power of
the City of Los Angeles, Salt
River Project Agricultural
Improvement and Power District
and the Peabody Coal Company
10.19 Amended Mohave Project Coal Slurry 5.36 to Form S-7 2-56356
Pipeline Agreement dated May 26,
1976 between Peabody Coal Company
and Black Mesa Pipeline, Inc.
(Exhibit B to Exhibit 10.18)
10.20 Coal Supply Agreement dated October 5.38 to Form S-7 2-56356
15, 1975 between the Company and
United States Fuel Company
10.21 Amendment dated November 19, 1976 5.30 to Form S-7 2-62105
to Exhibit 10.20
10.22 Participation Agreement Reid 5.34 to Form S-7 2-65097
Gardner Unit No. 4 dated July
11, 1979 between the Company
and California Department of
Water Resources
16
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.23 Coal Supply Agreement dated 5.37 to Form S-7 2-62509
March 1, 1980 between the
Company and Beaver Creek
Coal Company
10.24 Coal Supply Agreement dated 5.38 to Form S-7 2-62509
March 1, 1980 between the
Company and Trail Mountain
Coal Company
10.25 Coal Supply Agreement dated 10.26 to Form 10-K 1-4698
December 8, 1980 between the Year 1981
Company and Plateau Mining
Company
10.26 Coal Supply Agreement dated 10.26 to Form 10-K 1-4698
August 31, 1982 between Year 1982
the Company and CO-OP
Mining Company
10.27 Coal Supply Agreement dated 10.27 to Form 10-K 1-4698
September 8, 1982 between the Year 1982
Company and Getty Mining
Company
10.28 Coal Supply Agreement dated 10.28 to Form 10-K 1-4698
September 8, 1982 between the Year 1982
Company and Tower Resources,
Inc.
10.29 Coal Supply Agreement dated 10.29 to Form 10-K 1-4698
September 22, 1982 between the Year 1982
Company and Beaver Creek Coal
Company
10.30 Memorandum of Understanding 10.30 to Form 10-K 1-4698
Concerning Interconnection Year 1983
between Utah Power & Light
Company and Nevada Power
Company dated February 2, 1984
10.31 Sublease Agreement between Powveg 10.31 to Form 10-K 1-4698
Leasing Corp., as Lessor and Year 1983
Nevada Power Company as Lessee,
dated January 11, 1984 for
lease of administrative
headquarters
10.32 Participation Agreement between 10.32 to Form 10-K 1-4698
Utah Power & Light Company and Year 1985
the Company dated December 19,
1985
10.33 Sale and Purchase Agreement dated 10.33 to Form 10-K 1-4698
as of December 23, 1985 by and Year 1985
between Nevada Power Company and
CP National Corporation
10.34 Restated Coal Sales Agreement as 10.34 to Form 10-K 1-4698
of July 1, 1985 by and between Year 1985
Nevada Power Company and Trail
Mountain Coal Company
10.35 Summary of Supplemental Executive 10.35 to Form 10-K 1-4698
Retirement Plan as approved Year 1985
November 14, 1985
17
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.36 Financing Agreement dated as of 10.36 to Form 10-K 1-4698
February 1, 1983 between Clark Year 1985
County, Nevada and Nevada Power
Company
10.37 Financing Agreement between Clark 10.37 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1985
Company dated as of December 1,
1985
10.38 Reimbursement Agreement dated 10.38 to Form 10-K 1-4698
as of December 1, 1985 between Year 1986
The Fuji Bank, Limited and
Nevada Power Company
10.39 Contract for Sale of Electrical 10.39 to Form 10-K 1-4698
Energy between the State of Year 1987
Nevada and the Company, dated
July 8, 1987
10.40 Power Sales Agreement between 10.40 to Form 10-K 1-4698
Utah Power & Light Company and Year 1987
the Company, dated August 17,
1987
10.41 Transmission Facilities Agreement 10.41 to Form 10-K 1-4698
between Utah Power & Light Year 1987
Company and the Company, dated
August 17, 1987
10.42 Financing Agreement between Clark 10.42 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1988
Company dated as of November 1,
1988
10.43 Reimbursement Agreement dated 10.43 to Form 10-K 1-4698
as of November 1, 1988 between Year 1988
The Fuji Bank, Limited and
Nevada Power Company
10.44 Power Purchase Contract dated 10.45 to Form 10-K 1-4698
February 15, 1990 between Year 1989
Mission Energy Company and
Nevada Power Company
10.45 Contact for Long-Term Power 10.46 to Form 10-K 1-4698
Purchases from Qualifying Year 1989
Facilities dated May 1, 1989
between Oxford Energy of Nevada
and Nevada Power Company
10.46 Contract A for Long-Term Power 10.47 to Form 10-K 1-4698
Purchases from Qualifying Year 1989
Facilities dated May 2, 1989
between Bonneville Nevada
Corporation and Nevada Power
Company
10.47 Contract for Long-Term Power 10.48 to Form 10-K 1-4698
Purchases from Qualifying Year 1989
Facilities dated April 10, 1989
between Magna Energy Systems,
Eastern Sierra Energy Company
and Nevada Power Company
18
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.48 Contract B for Long-Term Power 10.49 to Form 10-K 1-4698
Purchases from a Qualifying Year 1989
Facility dated October 27, 1989
between Bonneville Nevada
Corporation and Nevada Power
Company
10.49 Contract for Long-Term Power 10.50 to Form 10-K 1-4698
Purchases from Qualified Year 1989
Facilities dated February 12,
1990 between Las Vegas
Co-generation, Inc. and Nevada
Power Company
10.50 Agreement for Transmission 10.51 to Form 10-K 1-4698
Service dated March 29, 1989 Year 1989
between Overton Power District
No. 5 , Lincoln County Power
District No. 1 and Nevada Power
Company
10.51 Contract dated June 30, 1988 10.52 to Form 10-K 1-4698
between United States Department Year 1989
of Energy Western Area Power
Administration and Nevada Power
Company
10.52 Executive Performance Incentive 10.53 to Form 10-K 1-4698
Plan dated as of January 1, 1989 Year 1989
10.53 Severance Allowance Plan 10.54 to Form 10-K 1-4698
adopted September 14, 1989 Year 1989
10.54 Power Purchase Contract dated 10.55 to Form 10-K 1-4698
July 5, 1990 between Year 1990
Mission Energy Company and
Nevada Power Company
10.55 Contract B for Long-Term Power 10.56 to Form 10-K 1-4698
Purchases from a Qualifying Year 1990
Facility dated May 24, 1990
between Bonneville Nevada
Corporation and Nevada Power
Company
10.56 Amendment dated June 15, 1989 to 10.57 to Form 10-K 1-4698
Exhibit 10.45 Year 1990
10.57 Amendment dated August 23, 1989 10.58 to Form 10-K 1-4698
to Exhibit 10.45 Year 1990
10.58 Amendment dated April 23, 1990 10.59 to Form 10-K 1-4698
to Exhibit 10.45 Year 1990
10.59 Exhibit H dated August 13, 1990 10.60 to Form 10-K 1-4698
to Exhibit 10.45 Year 1990
10.60 Western Systems Power Pool 10.61 to Form 10-K 1-4698
Agreement (Agreement) dated Year 1990
January 2, 1991 between
thirty-nine other Western
Systems Power Pool members as
listed on pages 1 and 2 of the
Agreement and Nevada Power
Company
10.61 Financing Agreement between Clark 10.62 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1990
Company dated June 1, 1990
19
<PAGE>
EXHIBIT ORIGINALLY FILED
NO. DESCRIPTION AS EXHIBIT FILE NO.
- ------- ----------- ---------------- --------
10.62 Restated Power Sales Agreement 10.63 to Form 10-K 1-4698
dated March 25, 1991 between Year 1991
Pacificorp and Nevada Power
Company
10.63 Amendment dated July 17, 1990 to 10.64 to Form 10-K 1-4698
Exhibit 10.54 Year 1991
10.64 Financing Agreement between Clark 10.65 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1992
Company dated June 1, 1992
(Series 1992A)
10.65 Financing Agreement between Clark 10.66 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1992
Company dated June 1, 1992
(Series 1992B)
10.66 Financing Agreement between Clark 10.67 to Form 10-K 1-4698
County, Nevada and Nevada Power Year 1992
Company dated October 1, 1992
10.67 Power Sales Agreement dated 10.68 to Form 10-K 1-4698
October 19, 1992 between the Year 1992
Department of Water and Power
of the City of Los Angeles
and Nevada Power Company
10.68 Long-Term Incentive Plan dated 10.69 to Form 10-K 1-4698
as of January 1, 1993 Year 1993
10.69 Contract for Long-Term Power 10.70 to Form 10-K 1-4698
Purchases from Qualifying Year 1993
Facilities dated May 27, 1992
between Las Vegas Co-generation,
Inc. and Nevada Power Company
Replaces Exhibit 10.49
10.70 Settlement Agreement and Promissory 10.71 to Form 10-K 1-4698
Note between Mountain Coal Company Year 1993
and Atlantic Richfield Company and
Nevada Power Company dated
March 9, 1994
10.71 401(k) Savings Plan, as amended 99.1 to Form S-8 33-50809
and restated January 1, 1990
10.72 Amendment dated January 1, 1991 99.2 to Form S-8 33-50809
to Exhibit 10.71
10.73 Letter of Credit and Reimbursement 10.72 to Form 10-K 1-4698
Agreement dated as of April 12, Year 1994
1994 between Nevada Power Company
and Societe Generale, Los Angeles
Branch and Amendment No. 1 thereto
dated as of May 3, 1994
10.74 Loan Agreement dated as of November 10.73 to Form 10-K 1-4698
21, 1994 between Nevada Power Year 1994
Company, certain banks, and First
Interstate Bank of Nevada, N.A. as
the Administrative Agent
REPORTS ON FORM 8-K
The Company filed no current report on Form 8-K during the quarter
ended December 31, 1995.
20
<PAGE>
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
Nevada Power Company
We consent to the incorporation by reference in Registration Statement No.
33-62691 on Form S-3 and in Registration Statement No. 33-61365 on Form S-8 of
Nevada Power Company of our report dated February 14, 1996 incorporated by
reference in this Annual Report on Form 10-K of Nevada Power Company for the
year ended December 31, 1995.
Our audits of the financial statements referred to in our aforementioned report
also included the financial statement schedule of Nevada Power Company, listed
in Item 14. This financial statement schedule is the responsibility of Nevada
Power Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
March 22, 1996
21
<PAGE>
NEVADA POWER COMPANY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS OF DOLLARS)
RESERVE FOR
DOUBTFUL
ACCOUNTS
-----------
BALANCE AT DECEMBER 31, 1992............................. $ 803
Provision charged to income............................. 3,161
Amounts written off, less recoveries.................... (2,839)
-------
BALANCE AT DECEMBER 31, 1993............................. $ 1,125
Provision charged to income............................. 4,302
Amounts written off, less recoveries.................... (4,032)
-------
BALANCE AT DECEMBER 31, 1994............................. $ 1,395
Provision charged to income............................. 3,590
Amounts written off, less recoveries.................... (3,658)
-------
BALANCE AT DECEMBER 31, 1995............................. $ 1,327
=======
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NEVADA POWER COMPANY
--------------------------------------
(Registrant)
March 25, 1996 By CHARLES A. LENZIE
--------------------------------------
Charles A. Lenzie
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
March 25, 1996 By CHARLES A. LENZIE
--------------------------------------
Charles A. Lenzie, Chairman of
the Board, Chief Executive
Officer and Director
(Principal Executive Officer)
March 25, 1996 By STEVEN W. RIGAZIO
--------------------------------------
Steven W. Rigazio, Vice President,
Finance and Planning, Treasurer,
Chief Financial Officer
(Principal Financial and
Principal Accounting Officer)
March 25, 1996 By MARY LEE COLEMAN
--------------------------------------
Mary Lee Coleman, Director
March 25, 1996 By FRED D. GIBSON JR.
--------------------------------------
Fred D. Gibson Jr., Director
March 25, 1996 By JOHN L. GOOLSBY
--------------------------------------
John L. Goolsby, Director
March 25, 1996 By JERRY E. HERBST
--------------------------------------
Jerry E. Herbst, Director
March 25, 1996 By JOHN F. O'REILLY
--------------------------------------
John F. O'Reilly, Director
March 25, 1996 By CONRAD L. RYAN
--------------------------------------
Conrad L. Ryan, Director
March 25, 1996 By FRANK E. SCOTT
--------------------------------------
Frank E. Scott, Director
March 25, 1996 By ARTHUR M. SMITH
--------------------------------------
Arthur M. Smith, Director
March 25, 1996 By JELINDO A. TIBERTI
--------------------------------------
Jelindo A. Tiberti, Director
23
<PAGE>
<PAGE>
As Amended
March 9, 1995
RESTATED
BY-LAWS OF
NEVADA POWER COMPANY
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of the Company
shall be held on such date and at such time and place as the Board of
Directors shall from year to year designate for the purpose of electing
Directors of the Company to serve during the ensuing year and for the
transaction of such other business as may be brought before the meeting.
At least ten days' written notice specifying the time and place,
when and where the annual meeting shall be convened, shall be mailed in a
United States Post Office box addressed to each of the stockholders of
record at the time of issuing the notice at his or her or its address last
known, as the same appears on the books of the Company.
Nevertheless, a failure to give such notice or irregularity in
such notice shall not affect the validity of any annual meeting or of any
proceedings had at such meeting and in such event, these By-Laws shall be,
and shall be deemed to be, sufficient notice of such meeting without
requirement of further notice.
SECTION 2. All business lawful to be transacted by the
stockholders of the Company may be transacted at any special meeting or at
any adjournment thereof. Only such business, however, shall be acted upon
at a special meeting of the stockholders as shall have been referred to in
the notice calling such meetings, but at any stockholders' meeting at which
all of the outstanding Capital Stock of the Company is represented, either
in person or by proxy, any lawful business may be transacted and such
meeting shall be valid for all purposes.
SECTION 3. At all stockholders' meetings, the holders of fifty-
one percent (51%) in amount of the entire issued and outstanding Capital
Stock of the Company shall constitute a quorum for all the purposes of such
meetings.
If the holders of the amount of stock necessary to constitute a
quorum shall fail to attend in person or by proxy, at
<PAGE>
the time and place fixed by these By-laws for any annual meeting, or fixed
by a notice for a special meeting, a majority in interest of the
stockholders present in person or by proxy may adjourn, from time to time,
without notice other than by announcement at the meeting, until holders of
the amount of stock requisite to constitute a quorum shall attend. At any
such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted as originally called.
SECTION 4. At each meeting of the stockholders, every stockholder
shall be entitled to vote in person or by his duly authorized proxy
appointed by instrument in writing subscribed by such stockholder or his
duly authorized attorney. Each stockholder shall have one vote for each
share of stock standing registered in his or her or its name on the books of
the corporation, not less than ten (10) days preceding the day of such
meeting or on such other closing date as shall be set by the Board of
Directors, such closing date to be not more than sixty (60) days preceding
the date of any such stockholders' meeting, provided that if the closing
date for any such meeting falls on a Saturday, Sunday or Holiday, the
closing date shall be the next succeeding business day.
At each meeting of the stockholders, a full, true and complete
list, in alphabetical order, of all the stockholders entitled to vote at
such meeting and indicating the number of shares held by each, certified by
the Secretary or any Assistant Secretary or by the Transfer Agent of the
Company, shall be furnished, which list shall be prepared at least ten (10)
days before such meeting, and shall be open to the inspection of the
stockholders, or their Agents or Proxies, at the principal office of the
Company for ten (10) days prior to such meeting. Only the persons in whose
names shares of stock are registered on the books of the Company on the
closing date for such meeting, as evidenced by the list of stockholders so
furnished, shall be entitled to vote at such meeting. Proxies and Powers of
Attorney to vote must be filed with the Secretary of the Company before an
election or a meeting.
SECTION 5. At each meeting of the stockholders, the polls shall
be opened and closed, the proxies and ballots issued, received and be taken
in charge of for the purpose of the meeting, and all questions touching the
qualifications of voters and the validity of proxies and the acceptance or
rejection of votes, shall be decided by two inspectors. Such inspectors
shall be appointed at the meeting by the presiding officer of the meeting.
SECTION 6. At the stockholders' meetings, the regular order of
business shall be as follows:
1. Reading and approval of the minutes of previous meeting or
meetings
-2-
<PAGE>
2. Reports of the officers as the Board of Directors shall
designate.
3. Reports of Committees.
4. Election of Directors.
5. Unfinished business.
6. New business.
7. Adjournment.
SECTION 7. Stockholder action may be taken only at a meeting of
stockholders; and shall not be taken by written consent without a meeting.
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Directors by a majority vote thereof may provide
for the appointment of a Director or Directors Emeritus whose position shall
be honorary from time to time as they determine.
SECTION 2. Meetings of the Directors may be held at the principal
office of the Company in the City of Las Vegas, State of Nevada, or at any
other place within or without the State of Nevada, or at such other place or
places as the Board of Directors may from time to time determine.
SECTION 3. Without notice of call, the Board of Directors shall
hold its first Annual Meeting for the year immediately after the Annual
Meeting of the Stockholders or immediately after the election of Directors
at such Annual Meeting.
Regular meetings of the Board of Directors shall be held on the
second Thursday of each month at 9:00 o'clock in the morning. Notice of
such regular meetings shall be mailed to each director by the Secretary at
least three days previous to the day fixed for such meetings, but no regular
meeting shall be held void or invalid if such notice is not given provided
the meeting is held at the time and place fixed by these By-Laws.
Special meetings of the Board of Directors may be held on the call
of the Chairman of the Board, Chief Executive Officer or Secretary on at
least three days notice by mail to directors resident in the State of
Nevada, and on at least five days notice by mail, or three days notice by
telegraph or telecopy, to directors not resident in said State.
-3-
<PAGE>
Any meeting of the Board, no matter where held, at which all the
members shall be present, even though without or of which notice shall have
been waived by all absentees, provided a quorum shall be present, shall be
valid for all purposes unless otherwise indicated in the notice calling the
meeting or in the waiver of notice.
Any and all business may be transacted at any meeting of the Board
of Directors, either regular or special.
Any action of a majority of the Board of Directors, although not
at a regularly called meeting and the record thereof is assented to in
writing, by all of the other members of the Board, shall always be as valid
and effective in all respects as if passed by the board in regular meeting.
A majority of the Directors in office shall constitute a quorum
for the transaction of business, but if at any meeting of the Board there be
less than a quorum present, a majority of those present may adjourn from
time to time until a quorum shall be present and no notice of such
adjournment shall be required. The Board of Directors may prescribe rules,
not in conflict with these By-Laws, for the conduct of its business.
SECTION 4. A Director need not be a stockholder of the
corporation.
SECTION 5. The Directors including any Director Emeritus shall be
allowed and paid all reasonable fees and expenses incurred in attending any
meeting of the Board or Committee meetings of the Board as established by
the Board.
SECTION 6. The Chief Executive Officer, on behalf of the Board of
Directors, shall make a report to the stockholders at annual meetings of the
stockholders of the condition of the Company and shall, upon request,
furnish each of the stockholders with a true copy thereof. The President
may also make a report.
The Board of Directors in its discretion may submit any contract
or act for approval or ratification at any annual meeting of the
stockholders or at any meeting of the stockholders called for the purpose of
considering any such contract or act which, if approved or ratified by the
vote of the holders of a majority of the Capital Stock of the Company
represented in person or by proxy at such meeting provided that a lawful
quorum of stockholders be there represented in person or by holders thereof,
shall be binding upon the Company as if it had been approved or ratified by
every stockholder of the Corporation.
SECTION 7. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate an Executive committee. This
Committee shall consist of six members of the Board of Directors of the
Company, and the Chairman of the
-4-
<PAGE>
Committee shall be designated as such by the Board of Directors. The
Committee shall in the interim between the meetings of the Board, exercise
all powers of that body in accordance with the general policy of the
corporation and the direction of the Board of Directors. The Secretary of
the Company shall be the Secretary of the Executive committee and shall
attend its meetings and its meetings shall be held on the call of the
Chairman of the Committee. All members of the Committee must be given
reasonable notice of meetings either by mail or by personal communication,
either over the telephone or otherwise. A majority of the members of the
Committee shall constitute a quorum. The Committee shall keep due records
of all meetings and actions of the Committee. Such records shall at all
times be open to the inspection by any Director.
The Board of Directors may, by resolution passed by a majority of
the whole Board of Directors, designate an Audit Committee. This Committee
shall consist of at least five outside members of the Board of Directors and
the Committee shall designate a Chairman and Secretary of the Committee
whose duties will be to keep the records of all meetings and action of their
meetings. Such records shall at all times be open for inspection by the
Board of Directors. The Audit Committee shall meet as required and notice
thereof shall be given by the Secretary of the committee at least five days
prior to the meeting whether by mail or personal communication. A majority
of the members of the Committee shall constitute a quorum.
The duties and responsibilities of the Audit Committee shall be
to:
1. Consult with the internal auditors of the Company.
2. Recommend to the full Board of Directors a person or firm to
be retained as the Company's independent auditors.
3. Consult with the independent auditors as to the Plan of the
audit.
4. Review with the independent auditors the reports of their
audit.
5. Consult with the independent auditors with regard to the
adequacy of the Company's internal controls.
6. Perform any other duties or responsibilities assigned by the
Board of Directors.
The Board of Directors may, by resolution passed by a majority of
the whole Board, designate a Compensation Committee. This Committee shall
consist of four or more outside members of the Board of Directors. The
Committee shall designate a Chairman by a majority vote of the Committee
members. This Committee shall be
-5-
<PAGE>
primarily responsible for recommending and establishing salaries, salary
rates or other compensation of Directors, the principal officers or other
employees of the Company as approved and established by the full Board of
Directors of the Company. This Committee shall keep the records of all
meetings and actions of the Committee and all said records shall be open at
all times for inspection by any Director.
The Board of Directors may, by resolution passed by a majority of
the whole Board of Directors, designate a Pension Committee. This Committee
shall consist of five or more members of the Board of Directors. The
Committee shall designate a Chairman by a majority vote of the Committee
members. This Committee shall be primarily responsible for recommending and
assisting management in discussion with the trustees of the pension fund,
advising on investments and the handling of funds in the Nevada Power
Company Retirement and Defined Pension Plan and all other benefit plans
involving invested funds. This Committee shall keep the records of all
meetings and actions of the Committee and all said records shall be open at
all times for inspection by any Director.
The Board of Directors may, by resolution passed by a majority of
the whole Board of Directors, designate a Nominating Committee. This
Committee shall consist of four or more members of the Board of Directors.
The Committee shall designate a Chairman by a majority vote of the Committee
members. This Committee shall be primarily responsible for recommending
nominees for election to the Board of Directors. This Committee shall keep
the records of all meetings and actions of the Committee and all said
records shall be open at all times for inspection by any Director.
The Board of Directors may, by resolution passed by a majority of
the whole Board, designate any other committee. Such resolution shall
designate the number of directors to sit on such committee and shall set
forth in detail the responsibilities of such committee. Any recommendations
or actions of any such committee shall be subject to approval of the full
Board of Directors.
SECTION 8. The Board of Directors is invested with the complete
and unrestrained authority in the management of all the affairs of the
Company and is authorized to exercise for such purpose as the General Agent
of the Company, in its entire corporate authority.
SECTION 9. The regular order of business at meetings of the Board
of Directors shall be as follows:
1. Reading and approval of the minutes of any previous
meeting or meetings
-6-
<PAGE>
2. Reports of officers and committees
3. Election of officers
4. Unfinished business
5. New Business
6. Adjournment
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The officers of the Corporation shall be a chief
executive officer, president, a vice president, a secretary and a treasurer.
The Corporation may also have, at the discretion of the Board of Directors,
a chairman of the board, one or more additional vice presidents, one or more
assistant secretaries, one or more assistant treasurers and such other
officers as may be appointed in accordance with the provisions of Section 3
of this Article. One person may hold two or more offices, including those
of president, secretary and treasurer.
SECTION 2. Election. The officers of the Corporation, except
such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by the
Board of Directors at its first meeting after the Annual Meeting of
Stockholders and each shall hold his office until he shall resign or shall
be removed or otherwise disqualified to serve, or until his successors shall
be elected and qualify. In the event a vacancy shall occur in any office
appointed by the Board of Directors as specified in Section 5 of this
Article, The Board of Directors may fill such vacancy at any regular or
special meeting of the Board.
SECTION 3. Subordinate Officers, Etc.. The Board of Directors
may appoint such other officers as the business of the corporation may
require, each of whom shall hold office for such period, have such authority
and perform such duties as are provided in the By-Laws or as the Board of
Directors may from time to time determine.
SECTION 4. Removal and Resignation. Any officer may be removed,
either with or without cause, by the Board of Directors at any regular or
special meeting thereof, or except in case of an officer chosen by the Board
of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Board of Directors or to the President or to the Secretary of the
Corporation. Any such resignation shall take
-7-
<PAGE>
effect at the date of the receipt of such notice or at any later time
specified therein, and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in
the manner prescribed in the By-Laws for regular appointments to such
office.
SECTION 6. Chairman of the Board. The Chairman of the Board, ,
shall, if present, preside at all meetings of the Board of Directors and
stockholders. The Chairman shall exercise and perform such powers and
duties as may be assigned to him by the Board of Directors or prescribed by
the By-Laws. He shall have the responsibility of promoting the regular
attendance and full contribution of all members of the Board and of focusing
the work of the Board on those areas which are properly his responsibility.
He shall also have the responsibility of maintaining a sound working
relationship between the Board of Directors and the executive team.
SECTION 7. Chief Executive Officer. The Chief Executive Officer
shall be the chief executive of the corporation, and shall, subject to the
control of the Board of Directors, have general supervision, direction and
control of the business and officers of the corporation. He shall preside
at all meetings of the shareholders and Board of Directors in the absence of
the Chairman of the board. He shall have the general powers and duties of
management usually vested in the office of the Chief Executive Officer of a
corporation, and shall have such other powers and duties as may be
prescribed by the Board of Directors or the By-Laws.
SECTION 8. President. The President shall be the chief operating
officer of the corporation, unless the Board of Directors shall otherwise
designate, and shall, subject to the control of the Board of Directors and
the Chief Executive Officer, have general supervision, direction and control
of the business and officers of the corporation. He shall preside at all
meetings of the shareholders and Board of Directors in the absence of the
Chairman of the Board and Chief Executive Officer. He shall have the
general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as
may be prescribed by the Board of Directors, the Chief Executive Officer, or
the By-Laws.
SECTION 9. Vice President. In the absence or disability of the
Chief Executive Officer and President, the Vice Presidents, in order of
their rank as fixed by the Board of Directors, or if not ranked, the vice
president designated by the Board of Directors, shall perform all the duties
of the President, and when so acting, shall have all the powers of and be
subject to all the
-8-
<PAGE>
restrictions upon the President. One or more of the vice presidents may be
designated senior vice president or executive vice president. The vice
president so designated by the Board of Directors shall be considered the
ranking vice resident of the corporation and during the absence of the
President, shall perform all the duties of the President. During this
period, other vice presidents shall report to him. The vice presidents
shall have such other powers and perform such other duties as from time to
time may be prescribed for them respectively by the Board of Directors or by
the By-Laws, or by the Chief Executive Officer.
SECTION 10. Secretary. The Secretary shall keep or cause to be
kept, at the principal office or such other place as the Board of Directors
may order, a book of minutes of all meetings of directors and shareholders
with the time and place of holding, whether regular or special, and if
special, how authorized, the notice thereof given, the names of those
present at directors' meetings, the number of shares present or represented
at shareholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal
office or at the office of the corporation's transfer agent, a share
register or a duplicate share register showing the names of the shareholders
and their addresses, the number and classes of shares held by each, the
number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board of Directors required by the
By-Laws or by law to be given, and he shall keep the seal of the corporation
in safe custody, and shall keep written records and minutes of the meetings
of the board, and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors or by the By-Laws.
SECTION 11. Treasurer. The Treasurer shall keep and maintain, or
cause to be kept and maintained, adequate and correct accounts of the
properties and business transactions of the corporation, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses, capital
surplus and shares. Any surplus, including retained earnings, paid-in
surplus and surplus arising from a reduction of stated capital, shall be
classified according to source and shown in a separate account. The books
of account shall at all reasonable times be kept open to inspection by any
Director.
The Treasurer shall deposit all monies and other valuables in the
name and to the credit of the corporation with such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
Chief Executive Officer, President and directors whenever they request it,
an
-9-
<PAGE>
account of all of his transactions as Treasurer, and of the financial
condition of the corporation, and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or the By-
Law.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The Capital Stock of the company shall be issued in
such manner and at such times and upon such conditions as shall be
prescribed by the Board of Directors.
SECTION 2. A certificate or certificates for shares of the
Capital Stock of the company shall be issued to each shareholder when any
such shares are fully paid up. All such certificates shall be signed by the
President or a Vice President and the Secretary or an Assistant Secretary.
Where any such certificate is registered manually by a Registrar, the
signatures of a Transfer Agent and any such President, Vice president,
Secretary or Assistant Secretary may be facsimiles, engraved, stamped or
printed.
All certificates shall be consecutively numbered and the name of
the person owning the shares represented thereby, with the number of such
shares and date of issue shall be entered on the Company's books.
All certificates surrendered to the Company shall be canceled and
no new certificates shall be issued until the former certificates for the
same number of shares shall have been surrendered or cancelled.
SECTION 3. No transfer of stock shall be valid as against the
Company except on surrender and cancellation of the certificate therefor,
accompanied by an Assignment or Transfer by the owner thereof, made either
in person or under assignment, and a new certificate shall be issued
therefor.
Whenever any transfer shall be expressed as made for collateral
security and not absolutely, the same shall be so expressed in the entry of
said Transfer on the books of the Company.
SECTION 4. The Board of Directors shall have power and authority
to make all such rules and regulations not inconsistent herewith as it may
deem expedient concerning the issue, transfer and registration of
certificates for shares of the Capital Stock of the Company.
The Board of Directors may appoint Transfer Agents and Registrars
of Transfers and may require all Stock Certificates to
-10-
<PAGE>
bear the signature of such Transfer Agents and of such Registrars of
Transfers.
SECTION 5. The Stock Transfer books shall be closed for all
meetings of the stockholders thirty days prior to such meeting, (unless the
Board of Directors sets a different closing date for any such stockholders'
meeting in which event the Stock Transfer Books of the Company shall be
closed for such meeting as of the date fixed by the Board of Directors but
in no event shall such date be more than forty days preceding the date of
such stockholders' meeting), and shall be closed for the payment of such
dividends on such dates as from time to time may be fixed by the Board of
Directors.
SECTION 6. Any person or persons applying for a Certificate of
Stock in lieu of one alleged to have been lost or destroyed shall make
Affidavit or affirmation of fact, and shall deposit with the Company said
Affidavit. Whereupon, after the deposit of said Affidavit and upon such
person or persons giving Bond of Indemnity to the Company with surety to be
approved by the Board of Directors in double the current value of the stock
against any damage, loss or inconvenience to the Company, which may or can
arise in consequence of a new or duplicate Certificate being issued in lieu
of the one lost or missing, the Board of Directors may cause to be issued to
such persons, a new certificate or a duplicate certificate of the one so
lost or destroyed. The Board of Directors may in its discretion refuse to
issue such new duplicate certificate save upon the order of some court
having jurisdiction in such matter, anything herein contained to the
contrary, notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the corporation in Nevada
shall be at the Company offices at 6226 West Sahara Avenue in the City of
Las Vegas, Clark County, Nevada, and the Company may have a principal office
in any other state or territory or at any other location in the State of
Nevada, as the Board of Directors may designate.
SECTION 2. The stock ledger of the Company shall be kept at the
office of a Transfer Agent and shall be open to inspection by all who are
authorized to have the right to see the same. All other books of the
Company shall be kept at such places as may be prescribed by the Board of
Directors.
The Company shall keep at its principal office in the County of
Clark, State of Nevada, a statement setting out the name of the Transfer
Agent and its complete post office address,
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<PAGE>
including street and number where the Company's stock ledger is kept.
A copy of the By-Laws of the articles of Incorporation or any
amendments or Restatements thereto of the Company shall be kept at its
principal office in the State of Nevada, and shall be subject to the
inspection of any of the stockholders.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve
over and above the Capital Stock paid in, such amounts in its discretion as
it may deem advisable to fix as a reserve fund, and may, from time to time,
declare dividends from the accumulated profits of the Company in excess of
the amounts so reserved, and pay the same to the stockholders of the Company
and may also, if it deems the same advisable, declare stock dividends of the
unissued Capital Stock of the Company.
SECTION 2. The Board of Directors or the Executive Committee
shall by resolution determine limits under which the Chief Executive
Officer, President and/or other officers and employees are delegated
authority to enter into agreements, contracts or obligations (other than
checks in payment of indebtedness incurred by authority of the Board of
Directors) involving the payment of moneys or the credit of the Company.
SECTION 3. Unless otherwise ordered by the Board of Directors or
the Executive Committee, all agreements and contracts shall be signed by the
Chief Executive Officer, President and Secretary in the name and on behalf
of the Company and shall have the corporate seal thereto attached.
SECTION 4. All moneys of the corporation shall be deposited when
and as received by the Treasurer in such bank or banks or other depository
as may from time to time be designated by the Board of Directors, and such
deposits shall be made in the name of the Company.
SECTION 5. No note, acceptance, endorsement or other evidence of
indebtedness shall be valid as against the Company unless the same shall be
signed by the Chief Executive Officer, President or a Vice President and
attested by the Secretary or an Assistant Secretary or signed by the
Treasurer or an Assistant Treasurer, and countersigned by the President,
Vice President or Secretary. However, the Chief Executive Officer,
President and the Secretary or Assistant Secretary shall have the authority
to designate the officers and/or employees who shall sign checks against any
one or all of the accounts of the Company in its depository bank or banks,
and they are further authorized to
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<PAGE>
designate the number of officers and/or employees who shall sign each check
against said account or accounts. Any one of the officers and/or employees
authorized to sign checks on behalf of the Company may endorse checks or
drafts for deposit only, to the credit of the Company, in any one or all of
its designated depositories. No check or order for money shall be signed in
blank by officers and/or employees of the Company.
SECTION 6. No loan or advance of money other than for reasonable
travel and expense advances shall be made by the Company to any stockholder
or officer therein, unless the Board of Directors shall otherwise authorize.
SECTION 7. No director nor executive officer of the Company shall
be entitled to any salary or compensation for any service performed for the
company unless such salary or compensation shall be fixed by resolution of
the Board of Directors.
SECTION 8. The Company may take, acquire, hold, mortgage, sell or
otherwise deal in stocks or bonds or securities of any other corporation if
and as often as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause
to be executed, mortgages and liens without limit as to amount upon the
property and franchises of this corporation, and pursuant to the affirmative
vote, either in person or by proxy of the holders of a majority of the
Capital Stock issued and outstanding, the Directors shall have authority to
dispose in any manner of the whole property of this corporation.
SECTION 10. The Company shall have a corporate seal, the design
thereof being as follows:
SECTION 11. The provisions of NRS 78.378 to 78.3793, inclusive,
shall not apply to the Company.
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<PAGE>
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments or changes of these By-Laws may be made at
any regular or special meeting of the Board of Directors by a vote of not
less than a majority of the entire Board, or at any regular or special
meeting of shareholders of the Company.
ARTICLE VIII
INDEMNIFICATION
SECTION 1. Indemnification. The Company shall, unless prohibited
by Nevada Law, indemnify any person (an "Indemnitee") who is or was involved
in any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative, including
without limitation, any action, suit or proceeding brought by or in the
right of the Company to procure a judgment in its favor (collectively, a
"Proceeding") by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity or
enterprise, against all Expenses and Liabilities actually and reasonably
incurred by him in connection with such Proceeding. The right to
indemnification conferred in this Article VIII shall be presumed to have
been relied upon by the directors, officers, employees and agents of the
Company and shall be enforceable as a contract right and inure to the
benefit of heirs, executors and administrators of such individuals.
SECTION 2. Indemnification Contracts. The Board of Directors is
authorized, on behalf of the Company, to enter into, deliver and perform
agreements or other arrangements to provide any Indemnitee with specific
rights of indemnification in addition to the rights provided hereunder to
the fullest extent permitted by Nevada Law. Such agreements or arrangements
may provide (I) that the Expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
Company as they are incurred and in advance of the final disposition of any
such action, suit or proceeding provided that, if required by Nevada Law at
the time of such advance, the officer or director provides an undertaking to
repay such amounts if it is ultimately determined by a court of competent
jurisdiction that such individual is not entitled to be indemnified against
such expenses, (ii) that the Indemnitee shall be presumed to be entitled to
indemnification under this Article VIII or such agreement or arrangement and
the Company shall have the burden of proof to overcome that presumption,
(iii) for procedures to be followed by the Company and the Indemnitee in
making any determination of
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entitlement to indemnification or for appeals therefrom and (iv) for
insurance or such other Financial Arrangements described in Section 3 of
this Article VIII, all as may be deemed appropriate by the Board of
Directors at the time of execution of such agreement or arrangement.
SECTION 3. Insurance and Financial Arrangements. The Company
may, unless prohibited by Nevada Law, purchase and maintain insurance or
make other financial arrangements ("Financial Arrangements") on behalf of
any Indemnitee for any liability asserted against him and liability and
expenses incurred by him in his capacity as a director, officer, employee
or agent, or arising out of his status as such, whether or not the Company
has the authority to indemnify him against such liability and expenses.
Such other Financial Arrangements may include (I) the creation of a trust
fund, (ii) the establishment of a program of self-insurance, (iii) the
securing of the Company's obligation of indemnification by granting a
security interest or other lien on any assets of the Company, or (iv) the
establishment of a letter of credit, guaranty or surety.
SECTION 4. Definitions. For purposes of this Article:
Expenses. The word "Expenses" shall be broadly construed and,
without limitation, means (I) all direct and indirect costs incurred, paid
or accrued, (ii) all attorneys' fees, retainers, court costs, transcripts,
fees of experts, witness fees, travel expenses, food and lodging expenses
while traveling, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service, freight or other transportation fees and
expenses, (iii) all other disbursements and out-of-pocket expenses, and (iv)
amounts paid in settlement, to the extent permitted by Nevada Law; provided,
however, that "Expenses" shall not include any judgments or fines or excise
taxes or penalties imposed under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or other excise taxes or penalties.
Liabilities. "Liabilities" means liabilities of any type
whatsoever, including, but not limited to, judgments or fines, ERISA or
other excise taxes and penalties, and amounts paid in settlement.
Nevada Law. "Nevada Law" means Chapter 78 of the Nevada Revised
Statutes as amended and in effect from time to time or any successor or
other statutes of Nevada having similar import and effect.
This Article. "This Article" means Paragraphs 1 through 5 of this
Article VIII or any portion of them.
SECTION 5. Amendment. Sections 1 through 5 of this Article VIII,
including this Section 5, may only be amended by (I) a majority vote of the
Continuing Directors (as such term is
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defined in the Company's Restated Articles of Incorporation) or (ii) the
affirmative vote of holders of 80% of the Company's outstanding Voting
Stock; provided, however, no amendment or repeal of this Article VIII shall
adversely affect any right of any Indemnitee existing at the time such
amendment or repeal becomes effective.
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============================================================================
NEVADA POWER COMPANY
(Formerly Southern Nevada Power Co.)
TO
BANKERS TRUST COMPANY
as Trustee
------------------
TWENTY-SIXTH SUPPLEMENTAL INDENTURE
------------------
Dated as of May 1, 1995
============================================================================
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1
THIS TWENTY-SIXTH SUPPLEMENTAL INDENTURE dated as of May 1, 1995, made
by and between NEVADA POWER COMPANY (formerly SOUTHERN NEVADA POWER CO.),
a corporation duly organized and existing under the laws of the State of
Nevada (the "Company"), having its principal place of business at Las Vegas,
Nevada, party of first part, and BANKERS TRUST COMPANY (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), a banking corporation duly organized and existing under and
by virtue of the banking laws of the State of New York, having its principal
place of business at 4 Albany Street, New York, New York, (hereinafter
sometimes called the "Trustee"), party of the second part;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee its Indenture of Mortgage and Deed of Trust ("Original Indenture")
dated October 1, 1953, to secure the payment of the principal of and
interest and premium, if any, on all bonds of the Company at any time
outstanding thereunder; and, for the purpose of amending and supplementing
and further confirming the lien of the Original Indenture, has heretofore
executed and delivered the following Supplemental Indentures and Instrument
of Further Assurance, each dated as hereinafter set forth:
Instrument Date
---------- ----
First Supplemental Indenture August 1, 1954
Instrument of Further Assurance as of April 1, 1956
Second Supplemental Indenture September 1, 1956
Third Supplemental Indenture as of May 1, 1959
Fourth Supplemental Indenture as of October 1, 1960
Fifth Supplemental Indenture as of December 1, 1961
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2
Sixth Supplemental Indenture as of October 1, 1963
Seventh Supplemental Indenture as of August 1, 1964
Eighth Supplemental Indenture as of April 1, 1968
Ninth Supplemental Indenture as of October 1, 1969
Tenth Supplemental Indenture as of October 1, 1970
Eleventh Supplemental Indenture as of November 1, 1972
Twelfth Supplemental Indenture as of December 1, 1974
Thirteenth Supplemental Indenture as of October 1, 1976
Fourteenth Supplemental Indenture as of May 1, 1977
Fifteenth Supplemental Indenture as of September 1, 1978
Sixteenth Supplemental Indenture as of December 1, 1981
Seventeenth Supplemental Indenture as of August 1, 1982
Eighteenth Supplemental Indenture as of November 1, 1986
Nineteenth Supplemental Indenture as of October 1, 1989;
Twentieth Supplemental Indenture as of May 1, 1992
Twenty-First Supplemental Indenture as of June 1, 1992
Twenty-Second Supplemental Indenture as of June 1, 1992
Twenty-Third Supplemental Indenture as of October 1, 1992
Twenty-Fourth Supplemental Indenture as of October 1, 1992
Twenty-Fifth Supplemental Indenture as of January 1, 1993
the Original Indenture, as amended and supplemented by the instruments
listed above and as to be supplemented by this Twenty-Sixth Supplemental
Indenture and as it may from time to time be amended or supplemented
pursuant to the provisions thereof, is hereinafter sometimes called the
"Indenture";
WHEREAS, the Original Indenture, the Instrument of Further Assurance
and the Supplemental Indentures listed in the foregoing paragraph were
recorded
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3
in Offices of the County Recorders of the States of Nevada, Arizona and Utah
as set forth in Exhibit A attached hereto and incorporated herein by
reference;
WHEREAS, in addition to fifteen series of Bonds heretofore issued under
the Indenture, all of which have been retired, there have heretofore been
issued under the Indenture $15,000,000 principal amount of First Mortgage
Bonds, 7 1/8% Series I Due 1998 of which $15,000,000 is now outstanding;
$15,000,000 principal amount of First Mortgage Bonds, 7 5/8% Series L Due
2002 of which $15,000,000 is now outstanding; $13,000,000 principal amount
of First Mortgage Bonds, 7 1/8% Series N Due 2006 of which $13,000,000
is now outstanding; $9,500,000 principal amount of First Mortgage Bonds,
6 3/4% Series O Due 2007 of which $6,300,000 is now outstanding; $730,000
principal amount of First Mortgage Bonds, 8 3/4% Series P Due 1995 of which
$401,500 is now outstanding; $15,000,000 principal amount of First Mortgage
Bonds, 7.80% Series T Due 2009 of which $15,000,000 is now outstanding;
$105,000,000 principal amount of First Mortgage Bonds, 6.70% Series V due
2022 of which $105,000,000 is now outstanding; $39,500,000 principal amount
of First Mortgage Bonds, 6.60% Series W due 2019 of which $39,500,000 is now
outstanding; $78,000,000 principal amount of First Mortgage Bonds, 7.20%
Series X Due 2022 of which $78,000,000 is now outstanding; $45,000,000
principal amount of First Mortgage Bonds, 6.93% Series Y Due 1999 of which
$45,000,000 is now outstanding; and $45,000,000 principal amount of First
Mortgage Bonds, 8.50% Series Z due 2023 of which $45,000,000 is now
outstanding;
WHEREAS, the Company in the exercise of the power and authority
conferred upon and reserved to it under the provisions of the Indenture, and
pursuant to a resolution duly adopted by its Board of Directors, has
resolved and determined to create and issue a new series of Bonds to be
designated "First
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4
Mortgage Bonds, 7.06% Series AA Due 2000" (hereinafter sometimes referred to
as "Bonds of Series AA") and to make, execute and deliver to the Trustee
this Twenty-Sixth Supplemental Indenture, in the form hereof, as a further
supplement to the Indenture; and
WHEREAS, all conditions and requirements necessary to make this Twenty-
Sixth Supplemental Indenture a valid, binding and legal instrument have been
done, performed and fulfilled, and the execution and delivery hereof have
been in all respects duly authorized;
NOW, THEREFORE, in consideration of the premises and of the sum of one
dollar ($1), lawful money of the United States of America, duly paid by the
Trustee to the Company, and of other good and valuable consideration,
receipt whereof is hereby acknowledged, and for the purpose of securing the
due and punctual payment of the principal of and interest on all Bonds
issued and outstanding from time to time under the Indenture, including
specifically, but without limitation, Bonds of Series AA to be issued
pursuant to this Twenty-Sixth Supplemental Indenture, and to secure the
performance and observation of each and every of the covenants and
conditions contained in the Indenture, and without in any way limiting the
generality or effect of the Indenture insofar as by any provision thereof
any of the properties therein or hereinafter referred to are now subject, or
are now intended to be subject to the lien and operation thereof, but to
such extent confirming such lien and operation, the Company has executed and
delivered this Twenty-Sixth Supplemental Indenture and has granted,
bargained, sold, warranted, aliened, remised, released, conveyed, assigned,
transferred, mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, warrant, alien, remise, release, convey,
assign, transfer, mortgage, pledge, set over and confirm, unto Bankers Trust
Company, as Trustee aforesaid, and to its successors in the trust hereby
created, in trust upon the conditions,
<PAGE>
5
terms and provisions of the Indenture, subject to the encumbrances and other
matters permitted by the Indenture, all and singular the following premises,
properties, interests and rights, all to the same extent and with the same
force and effect as though owned by the Company at the date of execution of
the Original Indenture and described in the same detail in the Granting
Clauses of the Original Indenture, such premises, properties, interests and
rights having been generally described and referred to in the Original
Indenture; and to such ends the Company hereby supplements, as below set
forth, the Granting Clauses of the Original Indenture:
GRANTING CLAUSES
All of the premises, property, franchises and rights of every kind and
description, real, personal and mixed, tangible and intangible, now owned or
hereafter acquired by the Company and wherever situate.
Together with all and singular the tenements, hereditament and
appurtenances belonging or in anywise appertaining to the aforesaid property
or any part thereof, with the reversion and reversions, remainder and
remainders, tolls, rents, revenues, issues, income, products and profits
thereof and all the estate, right, title, interest and claim whatsoever at
law as well as in equity, which the Company now has or may hereafter
acquire in and to the aforesaid property and franchises and every part and
parcel thereof.
Excepting and excluding, however, any and all property, premises and
rights of the kinds or classes which by the terms of the Indenture are
excepted and excluded from the lien and operation thereof, and therein
sometimes referred to as "Excepted Property" (subject, however, to the
Trustee's rights to possession
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6
of Excepted Property in case of default, as set forth under "Excepted
Property" in the Original Indenture).
TO HAVE AND TO HOLD in trust with power of sale for the equal and
proportionate benefit and security of all holders of all Bonds and the
interest coupons appertaining thereto, now or hereafter issued under the
Indenture, and for the enforcement and payment of Bonds and interest thereon
when payable, and the performance of and compliance with the covenants and
conditions of the Indenture, without any preference, distinction or priority
as to lien or otherwise of any Bonds or coupons over any others thereof by
reason of the difference in the time of the actual issue, sale or
negotiation thereof, or by reason of the date of maturity thereof, or for
any other reason whatsoever, except as otherwise expressly provided in the
Indenture, so that each and every Bond shall have the same lien and so that
the interest and principal of every Bond shall, subject to the terms
thereof, be equally and proportionately secured by said lien, as if such
Bond had been made, executed, delivered, sold and negotiated simultaneously
with the execution and delivery of the Original Indenture.
The Trustee executes this Twenty-Sixth Supplemental Indenture only on
the condition that it shall have and enjoy with respect thereto all of the
rights, privileges and immunities as set forth in the Indenture.
The Company has agreed and covenanted and does hereby agree and
covenant with the Trustee and its successors and assigns, and with the
respective holders from time to time of the Bonds, or any thereof, as
follows:
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7
PART I
ARTICLE I
DESCRIPTION OF BONDS OF SERIES AA DUE 2000
1.01 The twenty-sixth series of Bonds to be executed, authenticated
and delivered under and secured by the Indenture shall be the Bonds of
Series AA. The Bonds of Series AA shall be designated as "First Mortgage
Bonds, 7.06% Series AA Due 2000" of the Company. The Bonds of Series AA
shall be executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, all of the terms,
conditions and covenants of the Indenture.
All of the Bonds of Series AA shall be registered Bonds without
coupons, shall be dated May 19, 1995, shall mature May 1, 2000 and shall
bear interest at the rate of seven and six one hundredths percent (7.06%)
per annum, payable semiannually in arrears on the first day of May and the
first day of November in each year ("interest payment dates"). The
principal of and premium, if any, and interest on all Bonds of Series AA
shall be payable at the office of the Trustee in New York, New York.
Interest on any Bond which is payable on any interest payment date will be
paid to the person in whose name such Bond is registered at the close of
business on the fifteenth day (whether or not a business day) next preceding
such interest payment date.
The Bonds of Series AA may be issued in the form of engraved bonds, or
bonds printed or lithographed upon steel engraved borders, and may have such
legends or endorsements printed, lithographed or engraved thereon as may,
consistently with the Indenture, be approved by the Board of Directors.
1.02 The Bonds of Series AA shall be issued in denominations of One
Thousand Dollars ($1,000) and any integral multiple of One Thousand Dollars
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8
($1,000) which may be executed by the Company and delivered to the Trustee
for authentication and delivery.
1.03 The Bonds of Series AA and the Trustee's Certificate of
Authentication shall be substantially in the following forms, respectively:
[FORM OF FACE OF BOND OF SERIES AA]
NEVADA POWER COMPANY
No. R......................... $.........................
FIRST MORTGAGE BOND, 7.06% SERIES AA DUE 2000
Due May 1, 2000
For value received, NEVADA POWER COMPANY, a corporation organized and
existing under the laws of the State of Nevada (hereinafter called the
"Company"), hereby promises to pay to......................... or registered
assigns, on May 1, 2000, the sum of......................... Dollars, or so
much thereof as shall not be noted by endorsement hereon by the holder as
paid, in coin or currency of the United States of America which at the time
of payment is legal tender for the payment of public and private debts, and
to pay to the registered holder hereof interest thereon from the date
hereof, at the rate of seven and six one hundredths percent (7.06%) per
annum, in like coin or currency, payable semiannually in arrears on the
first day of May and the first day of November in each year ("interest
payment dates") until the principal hereof shall have become due and
payable, and thereafter, if default be made in the payment of such interest
or principal at the same rate of interest per annum, until the principal
thereof shall be paid. The principal of and premium, if any, and interest
on this Bond are payable at the office of the Trustee in New York, New York.
Interest on this Bond which is payable on any interest payment date will be
paid to the
<PAGE>
9
person in whose name this Bond is registered at the close of business on the
fifteenth day (whether or not a business day) next preceding such interest
payment date.
Additional provisions of this Bond are contained on the reverse hereof
and such provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Bond shall not be valid or become obligatory for any purpose until
the certificate endorsed hereon shall be signed by the Trustee under the
Indenture.
IN WITNESS WHEREOF, NEVADA POWER COMPANY has caused these presents to
be signed in its name by its President or a Vice President and its corporate
seal (or a facsimile thereof) to be affixed hereto and attested by its
Secretary.
Dated: NEVADA POWER COMPANY
Attest: By:
---------------------------
Vice President
- --------------------------
Secretary
<PAGE>
10
[FORM OF REVERSE OF BOND OF SERIES AA]
This Bond is one of an issue of Bonds of the Company issuable in
series, and is one of the Bonds of the series named in the caption hereof
(the Bonds of said series being hereinafter called "Bonds of Series AA"),
all Bonds of all series issued and to be issued under, and equally and
ratably secured (except insofar as any Sinking Fund or analogous fund may
afford additional security for the Bonds of any particular series) by an
Indenture of Mortgage and Deed of Trust dated October 1, 1953 as amended and
supplemented by the following Supplemental Indentures and Instrument of
Further Assurance, each dated as hereinafter set forth:
Instrument Date
---------- ----
First Supplemental Indenture August 1, 1954
Instrument of Further Assurance as of April 1, 1956
Second Supplemental Indenture September 1, 1956
Third Supplemental Indenture as of May 1, 1959
Fourth Supplemental Indenture as of October 1, 1960
Fifth Supplemental Indenture as of December 1, 1961
Sixth Supplemental Indenture as of October 1, 1963
Seventh Supplemental Indenture as of August 1, 1964
Eighth Supplemental Indenture as of April 1, 1968
Ninth Supplemental Indenture as of October 1, 1969
Tenth Supplemental Indenture as of October 1, 1970
Eleventh Supplemental Indenture as of November 1, 1972
Twelfth Supplemental Indenture as of December 1, 1974
Thirteenth Supplemental Indenture as of October 1, 1976
Fourteenth Supplemental Indenture as of May 1, 1977
Fifteenth Supplemental Indenture as of September 1, 1978
<PAGE>
11
Sixteenth Supplemental Indenture as of December 1, 1981
Seventeenth Supplemental Indenture as of August 1, 1982
Eighteenth Supplemental Indenture as of November 1, 1986
Nineteenth Supplemental Indenture as of October 1, 1989
Twentieth Supplemental Indenture as of May 1, 1992
Twenty-First Supplemental Indenture as of June 1, 1992
Twenty-Second Supplemental Indenture as of June 1, 1992
Twenty-Third Supplemental Indenture as of October 1, 1992
Twenty-Fourth Supplemental Indenture as of October 1, 1992
Twenty-Fifth Supplemental Indenture as of January 1, 1993
Twenty-Sixth Supplemental Indenture as of May 1, 1995
(which Indenture of Mortgage and Deed of Trust as so amended and
supplemented is hereinafter in this Bond called the "Indenture"), executed
by the Company to Bankers Trust Company (successor to First Interstate Bank
of Nevada, N.A., formerly First National Bank of Nevada, Reno, Nevada)
("Trustee"), as Trustee, to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the properties
mortgaged and pledged, the nature and extent of the security, the terms and
conditions upon which the Bonds are and are to be secured and the rights,
duties and immunities thereunder of the holders or registered owners
thereof, of the Company, and of the Trustee. As provided in the Indenture,
said Bonds may be issued in series, for various principal sums, may bear
different dates and mature at different times, may bear interest at
different rates and may otherwise vary as in the Indenture provided or
permitted. The Bonds of Series AA are described in said Twenty-Sixth
Supplemental Indenture dated as of May 1, 1995 ("Twenty-Sixth Supplemental
Indenture") executed by the Company to Bankers Trust Company, as Trustee,
and are issuable as registered bonds without coupons in denominations of
$1,000 and any integral multiple thereof.
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12
The Bonds of Series AA are not subject to redemption prior to maturity,
whether to satisfy any sinking fund or renewal and replacement obligation
under the Indenture or otherwise, except that if all or substantially all of
the property of the Company subject to the lien of the Indenture shall be
taken by the exercise of the power of eminent domain or shall be sold by the
Company and released under the provisions of Article XI of the Indenture,
the Company shall call for redemption and redeem all of the Bonds of Series
AA then outstanding for 100% of the principal amount thereof, together with
accrued interest thereon, to the date of redemption.
To the extent permitted by and as provided in the Indenture, the rights
and obligations of the Company and of the holders of Bonds of Series AA may
be changed and modified with the consent of the Company and upon the written
consent of the holders of at least sixty-six and two-thirds percent (66
2/3%) in principal amount of each series of the Bonds then outstanding and
entitled to consent, provided that no such change shall be made (a) which
would without the consent of the holders of all Bonds then outstanding and
affected thereby (i) reduce the principal of, or premium, sinking fund, or
rate of interest payable on, the Bonds, (ii) postpone the maturity date
fixed for the payment of the principal of, sinking fund upon, or any
installment of interest on, the Bonds, (iii) permit the creation of any
lien, not otherwise permitted, prior to or on a parity with the lien of the
Indenture, or (iv) reduce the percentage of the principal amount of Bonds
the consent of the holders of which is required for the authorization of
any such change or modification, or (b) which would modify, without the
written consent o f the Trustee, the rights, duties or immunities of the
Trustee.
In case an event of default as defined in the Indenture shall occur and
be continuing, the principal of all the Bonds outstanding may be declared
and may become due and payable in the manner and with the effect provided in
the Indenture.
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13
The Bonds of Series AA are interchangeable as to denominations in the
manner and upon the conditions prescribed in the Indenture.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any indenture supplemental thereto, or in
any Bond or coupon thereby secured, or because of any indebtedness thereby
secured, shall be had against any incorporator, or against any past,
present or future stockholder, officer, or director, as such, of the Company
or any successor corporation, either directly or through the Company or of
any successor corporation under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise; it being expressly agreed and understood
that the Indenture, any indenture supplemental thereto and the obligations
thereby secured, are solely corporate obligations, and that no personal
liability whatever shall attach to, or be incurred by, such incorporators,
stockholders, officers or directors, as such, of the Company or of any
successor corporation, or any of them, because of the incurring of the
indebtedness thereby authorized, or under or by reason of any of the
obligations, covenants or agreements contained in the Indenture or in any
indenture supplemental thereto or in any of the Bonds or coupons thereby
secured, or implied therefrom.
Upon any partial redemption of this Bond, at the option of the
registered holder hereof, this Bond may be either (i) surrendered to the
Trustee in exchange for one or more new registered Bonds of Series AA, of
authorized denominations, registered in the name of such holder, in an
aggregate principal amount equal to the principal amount remaining unpaid
upon this Bond, or (ii) submitted to the Trustee for notation hereon of
the payment of the portion of the principal hereof paid upon such partial
redemption.
This Bond is transferable by the registered holder hereof in person or
by the attorney of such holder, duly authorized in writing, on the registry
books to
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14
be kept for the purpose at the New York, New York office of the Trustee,
Registrar for the Bonds, upon surrender of this Bond accompanied by a
written instrument of transfer in form approved by the Company, duly
executed by the registered holder in person or by such attorney, and upon
cancellation hereof one or more new registered Bonds of Series AA for the
same aggregate principal amount, will be issued to the transferee in
exchange herefor, as provided in the Indenture.
The Company, the Trustee and any paying agent may deem and treat the
person in whose name this Bond is registered on such books as the absolute
owner and holder thereof (whether or not this Bond shall be overdue and
notwithstanding any notation of ownership or writing thereon which may have
been made by anyone other than the Company or the Trustee) for the purpose
of receiving payment hereof, and on account hereof and for all other
purposes and neither the Company, the Trustee nor any paying agent shall be
affected by any notice to the contrary.
[Trustee's Certificate to be endorsed on bonds]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds, of the series designated therein,
described in the within-mentioned Indenture.
BANKERS TRUST COMPANY, Trustee
By:
-----------------------
Authorized Officer
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15
ARTICLE II
AUTHORIZED PRINCIPAL AMOUNT
2.01 Bonds of Series AA may be executed by the Company and
authenticated and delivered by the Trustee at any time and from time to
time, in the manner and amount permitted by the Indenture; provided,
however, that no Bonds of Series AA in excess of Eighty-Five Million
Dollars ($85,000,000) principal amount (other than Bonds of Series AA which
may be so executed, authorized and delivered in lieu of other Bonds of
Series AA as authenticated under Article II or 10.01 of the Original
Indenture) shall be executed by the Company, authenticated or delivered by
the Trustee or secured by the Indenture, except in such additional principal
amounts as may be authorized by a supplemental indenture or indentures
which the Company and the Trustee are hereby authorized to execute and
deliver for that purpose.
ARTICLE III
REDEMPTION
3.01 The Bonds of Series AA shall not be redeemable prior to maturity,
whether to satisfy any sinking fund or renewal and replacement obligation
under the Indenture or otherwise, except as provided in Section 11.07 of the
Original Indenture.
The redemption price of any Bonds of Series AA which are to be redeemed
pursuant to 11.07 of the Original Indenture shall be the principal amount
thereof plus accrued interest to the date fixed for redemption.
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16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 The Company represents and warrants that, as of the date of
execution of this Twenty-Sixth Supplemental Indenture, it has good and
marketable title in fee simple to all the real properties described in the
Granting Clauses of the Original Indenture, the First Supplemental
Indenture, the Instrument of Further Assurance, the Second Supplemental
Indenture, the Third Supplemental Indenture, the Fourth Supplemental
Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental
Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental
Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental
Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental
Indenture, the Thirteenth Supplemental Indenture, the Fourteenth
Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth
Supplemental Indenture, the Seventeenth Supplemental Indenture, the
Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture,
the Twentieth Supplemental Indenture, the Twenty-First Supplemental
Indenture, the Twenty-Second Supplemental Indenture, the Twenty-
Third Supplemental Indenture, the Twenty-Fourth Supplemental Indenture, the
Twenty-Fifth Supplemental Indenture and this Twenty-Sixth Supplemental
Indenture (except any property heretofore released from the lien of the
Indenture in accordance with the terms thereof), free and clear of any liens
and encumbrances except Permitted Encumbrances and those, if any, referred
to in said Granting Clauses, and that it has good and marketable title and
is lawfully possessed of all other properties described in said Granting
Clauses (except any properties therein described as to be acquired by the
Company after the date of this Twenty-Sixth Supplemental Indenture and
except any property heretofore released from the lien of the Indenture in
accordance with the terms thereof), and
<PAGE>
17
the Indenture constitutes a direct and valid first mortgage lien on all such
properties, subject only to Permitted Encumbrances and those, if any,
referred to in said Granting Clauses. The Company represents and warrants
that it has and covenants that it will continue to have, subject to the
provisions of the Indenture, good right, full power and lawful authority to
grant, bargain, sell, warrant, alien, remise, release, convey, assign,
transfer, mortgage, pledge, set over and confirm to the Trustee all
properties of every kind and nature described or referred to in said
Granting Clauses (except any properties therein described as to be acquired
by the Company after the date of this Twenty-Sixth Supplemental Indenture)
which by the provisions of the Indenture are intended to be subject to the
lien of the Indenture and that it will defend the title to such property
and every part thereof to the Trustee forever, for the benefit of the
holders of the Bonds, against the claims and demands of all persons
whomsoever.
ARTICLE V
RENEWAL AND REPLACEMENT FUND
5.01 Notwithstanding anything to the contrary contained elsewhere in
the Indenture, cash deposited with the Trustee pursuant to 9.06 of the
Original Indenture (a) shall not be used to redeem Bonds of Series AA prior
to maturity, and (b) shall be retained by the Trustee and, unless withdrawn
pursuant to the provisions of 9.06 of the Original Indenture, shall be
applied by the Trustee to the payment of principal and accrued interest on
the Bonds of Series AA at maturity.
<PAGE>
18
PART II
MISCELLANEOUS PROVISIONS
Except insofar as herein otherwise expressly provided, all of the
definitions, provisions, terms and conditions of the Indenture shall be
deemed to be incorporated in, and made a part of, this Twenty-Sixth
Supplemental Indenture; and the Original Indenture as amended and
supplemented by the First Supplemental Indenture, the Second Supplemental
Indenture, the Third Supplemental Indenture, the Fourth Supplemental
Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental
Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental
Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental
Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental
Indenture, the Thirteenth Supplemental Indenture, the Fourteenth
Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth
Supplemental Indenture, the Seventeenth Supplemental Indenture, the
Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture,
the Twentieth Supplemental Indenture, the Twenty-First Supplemental
Indenture, the Twenty-Second Supplemental Indenture, the Twenty-Third
Supplemental Indenture, the Twenty-Fourth Supplemental Indenture and the
Twenty-Fifth Supplemental Indenture and is in all respects ratified and
confirmed and supplemented by this Twenty-Sixth Supplemental Indenture;
and the Original Indenture as amended and supplemented shall be read, taken
and construed as one and the same instrument.
All covenants, promises, agreements, undertakings and provisions of the
Indenture which exist for the benefit of, or while or so long as 1983 Series
Bonds, Series B Bonds, Series C Bonds, Series D Bonds, Series E Bonds,
Series F Bonds, Series G Bonds, Series H Bonds, Series I Bonds, Series J
Bonds, Series K Bonds, Series L Bonds, Series M Bonds, Series N Bonds,
Series O Bonds, Series P Bonds, Series Q, Series R, Series S, Series T
Bonds, Series V Bonds, Series W Bonds, Series X Bonds, Series Y Bonds and
Series Z Bonds are
<PAGE>
19
outstanding, are hereby expressed to exist also for the benefit of Bonds of
Series AA and for that purpose shall be observed, performed and complied
with by the Company so long as any Bonds of Series AA shall be outstanding.
This Twenty-Sixth Supplemental Indenture shall be effective as of the
date first hereinabove set forth, and may be executed simultaneously or from
time to time in several counterparts, and each counterpart shall constitute
an original instrument, and it shall not be necessary in making proof of
this Twenty-Sixth Supplemental Indenture or of any counterpart thereof to
produce or account for any of the other counterparts.
<PAGE>
20
IN WITNESS WHEREOF, said Nevada Power Company has caused this Twenty-
Sixth Supplemental Indenture to be executed on its behalf by its Vice
President and its corporate seal to be hereto affixed, and the said seal
and this Twenty-Sixth Supplemental Indenture to be attested by its
Secretary; and said Bankers Trust Company in evidence of its acceptance of
the trust hereby created has caused this Twenty-Sixth Supplemental Indenture
to be executed on its behalf by its Assistant Vice President and its
corporate seal to be hereto affixed and said seal and this Twenty-Sixth
Supplemental Indenture to be attested by its Assistant Treasurer, all as of
the 1st day of May, 1995.
NEVADA POWER COMPANY
By:
----------------------
[S E A L]
ATTEST:
- ----------------------------
BANKERS TRUST COMPANY, as
Trustee
By: JAMES MCDONOUGH
-----------------------
Assistant Vice President
[S E A L]
ATTEST:
SCOTT THIEL
- --------------------------
Assistant Treasurer
<PAGE>
20
IN WITNESS WHEREOF, said Nevada Power Company has caused this Twenty-
Sixth Supplemental Indenture to be executed on its behalf by its Vice
President and its corporate seal to be hereto affixed, and the said seal
and this Twenty-Sixth Supplemental Indenture to be attested by its
Secretary; and said Bankers Trust Company in evidence of its acceptance of
the trust hereby created has caused this Twenty-Sixth Supplemental Indenture
to be executed on its behalf by its Assistant Vice President and its
corporate seal to be hereto affixed and said seal and this Twenty-Sixth
Supplemental Indenture to be attested by its Assistant Treasurer, all as of
the 1st day of May, 1995.
NEVADA POWER COMPANY
By: STEVEN W. RIGAZIO
---------------------
[S E A L]
ATTEST:
RICHARD L. HINCKLEY
- ----------------------------
BANKERS TRUST COMPANY, as
Trustee
By:
-----------------------
Assistant Vice President
[S E A L]
ATTEST:
- --------------------------
Assistant Treasurer
<PAGE>
21
STATE OF NEVADA )
)ss.
COUNTY OF CLARK )
On this 15th day of May, 1995, personally appeared before me, a Notary
Public in and for said County and State, Steven W. Rigazio and Richard L.
Hinckley, known to me to be the Vice President, Finance and Planning,
Treasurer and Chief Financial Officer and Vice President, Secretary and
General Counsel, respectively of Nevada Power Company, one of the
corporations that executed the foregoing instrument, and upon oath did each
depose that he is the officer of said corporation as above designated; that
he is acquainted with the seal of said corporation and that the seal affixed
to said instrument is the corporate seal of said corporation; that the
signatures to said instrument were made by officers of said corporation as
indicated after said signatures, and that the said corporation executed the
said instrument freely and voluntarily and for the uses and purposes therein
mentioned.
ELVIRA T. COZZENS
[Notarial Seal] -------------------------------
Notary Public
<PAGE>
22
STATE OF NEW YORK )
)ss.
COUNTY OF NEW YORK )
On this day of May, 1995, before me personally came JAMES C.
----
McDONOUGH, to me known, who, being by me duly sworn, did depose and say that
he resides at 1250 North Avenue, New Rochelle, New York 10804; that he is an
Assistant Vice President of Bankers Trust Company, one of the corporations
described in and which executed the above instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name thereto by like order.
[Notarial seal] -------------------------
<PAGE>
23
STATE OF NEW YORK )
)ss.
COUNTY OF NEW YORK )
On this 15 day of May, 1995, before me personally came JAMES C.
--
McDONOUGH, to me known, who, being by me duly sworn, did depose and say that
he resides at 1250 North Avenue, New Rochelle, New York 10804; that he is an
Assistant Vice President of Bankers Trust Company, one of the corporations
described in and which executed the above instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name thereto by like order.
[Notarial seal] Carol Allen
-------------------------
<PAGE>
EXHIBIT A
The Original Indenture, First Supplemental Indenture, an Instrument of
Further Assurance, Second Supplemental Indenture, Third Supplemental
Indenture, Fourth Supplemental Indenture, Fifth Supplemental Indenture,
Sixth Supplemental Indenture, Seventh Supplemental Indenture, Eighth
Supplemental Indenture, Ninth Supplemental Indenture, Tenth Supplemental
Indenture, Eleventh Supplemental Indenture, Twelfth Supplemental Indenture,
Thirteenth Supplemental Indenture, Fourteenth Supplemental Indenture,
Fifteenth Supplemental Indenture, Sixteenth Supplemental Indenture,
Seventeenth Supplemental Indenture, Eighteenth Supplemental Indenture,
Nineteenth Supplemental Indenture, Twentieth Supplemental Indenture, Twenty-
First Supplemental Indenture, Twenty-Second Supplemental Indenture, Twenty-
Third Supplemental Indenture, Twenty-Fourth Supplemental Indenture and
Twenty-Fifth Supplemental Indenture were recorded in Offices of the County
Recorders of the States of Nevada, Arizona and Utah as follows:
NEVADA
CLARK COUNTY
<TABLE>
NEVADA, CLARK COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Nov. 6, 1953 417,677 Trust Deeds
First Supplemental Indenture Sept. 23, 1954 20,904 Official Records
Instrument of Further Assurance Apr. 19, 1956 75,779 Official Records
Second Supplemental Indenture Sept. 19, 1956 89,423 Official Records
Third Supplemental Indenture May 15, 1959 160,878 Official Records
Fourth Supplemental Indenture Oct. 28, 1960 215,907 Official Records
Fifth Supplemental Indenture Dec. 4, 1961 267,362 Official Records
Sixth Supplemental Indenture Oct. 18, 1963 391,466 Official Records
Seventh Supplemental Indenture Aug. 7, 1964 451,010 Official Records
Eighth Supplemental Indenture May 10, 1968 700,126 Official Records
Ninth Supplemental Indenture Oct. 16, 1969 791,246 Official Records
Tenth Supplemental Indenture Oct. 2, 1970 53,871 Official Records
Eleventh Supplemental Indenture Oct. 27, 1972 233,640 Official Records
Twelfth Supplemental Indenture Dec. 6, 1974 438,246 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 629,589 Official Records
Fourteenth Supplemental Indenture May 4, 1977 693,961 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 898,343 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 1,453,990 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 1,569,991 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 00622 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 00576 Official Records
Twentieth Supplemental Indenture April 30, 1992 01212 Official Records
Twenty-First Supplemental Indenture June 19, 1992 01239 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 01240 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 00858 Official Records
Twenty-Fourth Supplemental Indenture November 2, 1992 00901 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 00710 Official Records
</TABLE>
<PAGE>
A-2
NEVADA
NYE COUNTY
<TABLE>
NEVADA, NYE COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Sept. 19, 1956 24,334 Trust Deeds
First Supplemental Indenture Sept. 19, 1956 24,335 Official Records
Instrument of Further Assurance Sept. 19, 1956 24,336 Official Records
Second Supplemental Indenture Sept. 19, 1956 24,337 Official Records
Third Supplemental Indenture May 15, 1959 31,466 Official Records
Fourth Supplemental Indenture Oct. 28, 1960 37,060 Official Records
Fifth Supplemental Indenture Dec. 5, 1961 39,876 Official Records
Sixth Supplemental Indenture Oct. 18, 1963 46,249 Official Records
Seventh Supplemental Indenture Aug. 7, 1964 48,660 Official Records
Eighth Supplemental Indenture May 10, 1968 05,910 Official Records
Ninth Supplemental Indenture Oct. 17, 1969 15,192 Official Records
Tenth Supplemental Indenture Oct. 5, 1970 20,294 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 35,265 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 45,632 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 55,802 Official Records
Fourteenth Supplemental Indenture May 4, 1977 58,169 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 70,767 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 54,601 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 65,354 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 171,431 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 245632 Official Records
Twentieth Supplemental Indenture April 30, 1992 307547 Official Records
Twenty-First Supplemental Indenture June 19, 1992 310469 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 310470 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 320357 Official Records
Twenty-Fourth Supplemental Indenture November 2, 1992 320802 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 324817 Official Records
</TABLE>
<PAGE>
A-3
NEVADA
LINCOLN COUNTY
<TABLE>
NEVADA, LINCOLN COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Sept. 1, 1972 52,162 Official Records
First Supplemental Indenture Sept. 1, 1972 52,163 Official Records
Instrument of Further Assurance Sept. 1, 1972 52,164 Official Records
Second Supplemental Indenture Sept. 1, 1972 52,165 Official Records
Third Supplemental Indenture Sept. 1, 1972 52,166 Official Records
Fourth Supplemental Indenture Sept. 1, 1972 52,167 Official Records
Fifth Supplemental Indenture Sept. 1, 1972 52,168 Official Records
Sixth Supplemental Indenture Sept. 1, 1972 52,169 Official Records
Seventh Supplemental Indenture Sept. 1, 1972 52,170 Official Records
Eighth Supplemental Indenture Sept. 1, 1972 52,171 Official Records
Ninth Supplemental Indenture Sept. 1, 1972 52,172 Official Records
Tenth Supplemental Indenture Sept. 1, 1972 52,173 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 52,330 Official Records
Twelfth Supplemental Indenture Dec. 6, 1974 55,557 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 58,659 Official Records
Fourteenth Supplemental Indenture May 4, 1977 59,627 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 62,731 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 74,010 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 75,970 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 85,911 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 92444 Official Records
Twentieth Supplemental Indenture April 30, 1992 98382 Official Records
Twenty-First Supplemental Indenture June 19, 1992 98558 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 98559 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 99552 Official Records
Twenty-Fourth Supplemental Indenture November 2, 1992 99062 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 99782 Official Records
</TABLE>
<PAGE>
A-4
ARIZONA
NAVAJO COUNTY
<TABLE>
ARIZONA, NAVAJO COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Oct. 5, 1970 330 Official Records
First Supplemental Indenture Oct. 5, 1970 330 Official Records
Instrument of Further Assurance Oct. 5, 1970 330 Official Records
Second Supplemental Indenture Oct. 5, 1970 330 Official Records
Third Supplemental Indenture Oct. 5, 1970 330 Official Records
Fourth Supplemental Indenture Oct. 5, 1970 330 Official Records
Fifth Supplemental Indenture Oct. 5, 1970 330 Official Records
Sixth Supplemental Indenture Oct. 5, 1970 330 Official Records
Seventh Supplemental Indenture Oct. 5, 1970 330 Official Records
Eighth Supplemental Indenture Oct. 5, 1970 330 Official Records
Ninth Supplemental Indenture Oct. 5, 1970 330 Official Records
Tenth Supplemental Indenture Oct. 5, 1970 330 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 376 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 426 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 473 Official Records
Fourteenth Supplemental Indenture May 4, 1977 486 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 531 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 647 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 691 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 846 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 970 Official Records
Twentieth Supplemental Indenture April 30, 1992 1076 Official Records
Twenty-First Supplemental Indenture June 19, 1992 1083 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 1083 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 1103 Official Records
Twenty-Fourth Supplemental Indenture October 30, 1992 1104 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 1112 Official Records
</TABLE>
<PAGE>
A-5
ARIZONA
COCONINO COUNTY
<TABLE>
ARIZONA, COCONINO COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Oct. 1, 1970 370 Official Records
First Supplemental Indenture Oct. 1, 1970 370 Official Records
Instrument of Further Assurance Oct. 1, 1970 370 Official Records
Second Supplemental Indenture Oct. 1, 1970 370 Official Records
Third Supplemental Indenture Oct. 1, 1970 370 Official Records
Fourth Supplemental Indenture Oct. 1, 1970 370 Official Records
Fifth Supplemental Indenture Oct. 1, 1970 370 Official Records
Sixth Supplemental Indenture Oct. 1, 1970 370 Official Records
Seventh Supplemental Indenture Oct. 1, 1970 370 Official Records
Eighth Supplemental Indenture Oct. 1, 1970 370 Official Records
Ninth Supplemental Indenture Oct. 1, 1970 370 Official Records
Tenth Supplemental Indenture Oct. 5, 1970 370 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 445 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 528 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 606 Official Records
Fourteenth Supplemental Indenture May 4, 1977 628 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 697 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 862 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 896 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 1125 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 1304 Official Records
Twentieth Supplemental Indenture April 30, 1992 1471 Official Records
Twenty-First Supplemental Indenture June 19, 1992 1483 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 1483 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 1515 Official Records
Twenty-Fourth Supplemental Indenture October 30, 1992 1517 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 1535 Official Records
</TABLE>
<PAGE>
A-6
ARIZONA
MOHAVE COUNTY
<TABLE>
ARIZONA, MOHAVE COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Aug. 28, 1972 50 Official Records
First Supplemental Indenture Aug. 28, 1972 50 Official Records
Instrument of Further Assurance Aug. 28, 1972 50 Official Records
Second Supplemental Indenture Aug. 28, 1972 50 Official Records
Third Supplemental Indenture Aug. 28, 1972 50 Official Records
Fourth Supplemental Indenture Aug. 28, 1972 50 Official Records
Fifth Supplemental Indenture Aug. 28, 1972 50 Official Records
Sixth Supplemental Indenture Aug. 28, 1972 50 Official Records
Seventh Supplemental Indenture Aug. 28, 1972 51 Official Records
Eighth Supplemental Indenture Aug. 28, 1972 51 Official Records
Ninth Supplemental Indenture Aug. 28, 1972 51 Official Records
Tenth Supplemental Indenture Aug. 28, 1972 51 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 67 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 250 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 355 Official Records
Fourteenth Supplemental Indenture May 4, 1977 390 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 489 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 765 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 865 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 1264 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 1612 Official Records
Twentieth Supplemental Indenture April 30, 1992 92-12800 Official Records
Twenty-First Supplemental Indenture June 19, 1992 92-33181 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 92-33182 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 92-58584 Official Records
Twenty-Fourth Supplemental Indenture October 30, 1992 92-59727 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 2160 Official Records
</TABLE>
<PAGE>
A-7
UTAH
KANE COUNTY
<TABLE>
UTAH, KANE COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Sept. 12, 1972 35 Official Records
First Supplemental Indenture Sept. 12, 1972 35 Official Records
Instrument of Further Assurance Sept. 12, 1972 35 Official Records
Second Supplemental Indenture Sept. 12, 1972 35 Official Records
Third Supplemental Indenture Sept. 12, 1972 35 Official Records
Fourth Supplemental Indenture Sept. 12, 1972 35 Official Records
Fifth Supplemental Indenture Sept. 12, 1972 35 Official Records
Sixth Supplemental Indenture Sept. 12, 1972 35 Official Records
Seventh Supplemental Indenture Sept. 12, 1972 35 Official Records
Eighth Supplemental Indenture Sept. 12, 1972 35 Official Records
Ninth Supplemental Indenture Sept. 12, 1972 35 Official Records
Tenth Supplemental Indenture Sept. 12, 1972 35 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 35 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 44 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 53 Official Records
Fourteenth Supplemental Indenture May 4, 1977 55 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 59 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 71 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 074 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 093 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 0106 Official Records
Twentieth Supplemental Indenture April 30, 1992 72900 Official Records
Twenty-First Supplemental Indenture June 19, 1992 73283 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 73284 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 74584 Official Records
Twenty-Fourth Supplemental Indenture October 30, 1992 74641 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 75203 Official Records
</TABLE>
<PAGE>
A-8
UTAH
WASHINGTON COUNTY
<TABLE>
UTAH, WASHINGTON COUNTY
<CAPTION>
RECORDED DOC. NO. RECORDS
-------- -------- -------
<S> <C> <C> <C>
Original Indenture Sept. 22, 1972 124 Official Records
First Supplemental Indenture Sept. 22, 1972 124 Official Records
Instrument of Further Assurance Sept. 22, 1972 124 Official Records
Second Supplemental Indenture Sept. 22, 1972 124 Official Records
Third Supplemental Indenture Sept. 22, 1972 124 Official Records
Fourth Supplemental Indenture Sept. 22, 1972 124 Official Records
Fifth Supplemental Indenture Sept. 22, 1972 124 Official Records
Sixth Supplemental Indenture Sept. 22, 1972 124 Official Records
Seventh Supplemental Indenture Sept. 22, 1972 124 Official Records
Eighth Supplemental Indenture Sept. 22, 1972 124 Official Records
Ninth Supplemental Indenture Sept. 22, 1972 124 Official Records
Tenth Supplemental Indenture Sept. 22, 1972 124 Official Records
Eleventh Supplemental Indenture Oct. 30, 1972 127 Official Records
Twelfth Supplemental Indenture Dec. 9, 1974 163 Official Records
Thirteenth Supplemental Indenture Oct. 19, 1976 204 Official Records
Fourteenth Supplemental Indenture May 4, 1977 218 Official Records
Fifteenth Supplemental Indenture Sept. 5, 1978 239 Official Records
Sixteenth Supplemental Indenture Dec. 4, 1981 302 Official Records
Seventeenth Supplemental Indenture Aug. 19, 1982 313 Official Records
Eighteenth Supplemental Indenture Nov. 13, 1986 431 Official Records
Nineteenth Supplemental Indenture Oct. 12, 1989 537 Official Records
Twentieth Supplemental Indenture April 30, 1992 405624 Official Records
Twenty-First Supplemental Indenture June 19, 1992 409301 Official Records
Twenty-Second Supplemental Indenture June 19, 1992 409302 Official Records
Twenty-Third Supplemental Indenture October 26, 1992 417975 Official Records
Twenty-Fourth Supplemental Indenture October 30, 1992 418495 Official Records
Twenty-Fifth Supplemental Indenture January 11, 1993 423543 Official Records
</TABLE>
<PAGE>
The foregoing document was recorded as follows:
RECORDED DOC. NO. RECORDS
-------- -------- -------
Clark County, Nevada May 18, 1995 00625 Official Records
Nye County, Nevada May 18, 1995 372538 Official Records
Lincoln County, Nevada May 18, 1995 103516 Official Records
Navajo County, Arizona May 18, 1995 1995/7363 Official Records
Coconino County, Arizona May 18, 1995 1769 Official Records
Mohave County, Arizona May 18, 1995 2568 Official Records
Kane County, Utah May 18, 1995 83330 Official Records
Washington County, Utah May 18, 1995 500264 Official Records
<PAGE>
<PAGE>
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
RESOURCE DEVELOPMENT AND CONSTRUCTION PROGRAMS
Pursuant to Nevada law, every three years Nevada Power Company (Company) files
with the Public Service Commission of Nevada (PSC) a forecast of electricity
demands for the next 20 years and the Company's plans to meet those demands.
Among the major items in the Company's 1994 Resource Plan, as refiled and
amended, which were approved by the PSC in 1994 and 1995 are the following:
(1) the Company will continue to pursue a strategy of relying upon
short-term power purchases to meet the forecasted increases in
load;
(2) the Company will maintain sufficient flexibility to implement an
efficient cost-effective resource acquisition process where
appropriate, noting that the competitive solicitation process
remains the preferred method for comparing resource options;
(3) the Company will proceed with the installation of the initial
230 kV circuit and associated substation and communication
facilities on the previously approved Arden-Northwest 230 kV
Transmission Line;
(4) the Company will proceed with the rerouting of a portion of the
#2 Arden-McCullough 230 kV Transmission Line;
(5) the Company will proceed with limited resource planning approval
to seek the necessary UEPA and other permitting approvals, and to
acquire necessary sites and rights-of-way for two 230 kV switching
stations;
(6) the Company will proceed with a Renewable Energy Program for the
Company to utilize all appropriate incentives, resources, and
expertise to foster the development of economically competitive
renewable energy systems with the intent to provide Southern
Nevada customers with 20 megawatts of solar-generated electricity
by the year 2002.
The Company will file a status report along with any significant
modifications to the Resource Plan by April 1, 1996 regarding the outcome of
three energy service company contracts and the results of transmission studies
currently being performed.
Budgeted construction expenditures for 1996 and 1997 are $186 million and
$195 million, respectively, excluding allowance for funds used during
construction.
For the next five years customer growth is estimated to average 5.5 percent
per year while demand for electricity is estimated to increase by an average of
6.0 percent per year.
FINANCIAL STRATEGIES
The Company's customer growth averaged over 5.8 percent annually during the
three years ended December 31, 1995. To meet the growth forecasted for the
Company's service territory for the mid to late 1990s, the Company will
continue to rely upon the financial markets to provide a substantial portion of
the funds to build necessary Company-owned facilities.
The Company is committed to maintaining shareholder value throughout this
period of continuing rapid growth. To achieve this goal the Company will:
- - pursue a balanced financing approach utilizing low cost tax-exempt
financing when possible;
- - maintain ongoing cost containment efforts; and
- - seek legislative and regulatory support when necessary.
COST CONTAINMENT - The Company will continue to review all planned construction
and operating expenditures in an effort to reduce the level of external
financing required during this period of rapid growth. Management is constantly
reviewing expenditures in light of its commitment to provide shareholders with
returns that deliver long-term shareholder value, deliver quality service to
customers and provide a reliable supply of electricity at competitive prices.
CAPITALIZATION
To meet capital expenditure requirements through 1997, the Company will utilize
internally generated cash, the proceeds from industrial development revenue
bonds (IDBs), first mortgage bonds (FMBs), preferred securities and common
stock issues through public offerings and the Stock Purchase and Dividend
Reinvestment Plan (SPP).
NEW FINANCING CAPACITY - Under the tests required by the Company's FMBs and the
terms of its preferred stock issues, as of December 31, 1995, the Company could
issue up to $434 million of additional FMBs at an assumed interest rate of 8.0
percent and up to $371 million of additional preferred stock at an assumed
dividend of 8.0 percent.
In February 1996, the Company filed an application with the PSC seeking
approval to issue and sell up to 4 million shares of common stock, up to 3
million additional shares of common stock if participation in the SPP declines,
up to $80 million of new taxable debt, up to $45 million of preferred stock for
the purpose of refinancing existing preferred stock and up to $80 million of
new tax-advantaged preferred securities as an alternative to an equal amount of
new taxable debt with which such authorization to expire on December 31, 1997.
Approval is also being sought for the extension of authorization to issue up to
$150 million of unsecured promissory notes through December 31, 1999.
In February 1996, the Company filed an application with the PSC for approval
to issue up to $100 million of IDBs.
On September 11, 1995, the PSC gave the Company authorization to issue an
additional 4 million shares of common stock under the SPP.
24
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
EARNINGS TO INTEREST AND PREFERRED DIVIDENDS COVERAGE - For the year 1995, the
ratio of earnings to interest charges was 2.84 times compared to 3.11 times in
1994. The ratio of earnings to interest charges plus preferred dividends was
2.60 times in 1995 compared to 2.82 times in 1994.
COMMON EQUITY - The Company has the option to issue new common shares or
purchase shares on the open market to satisfy the needs of the SPP. During
1995, the Company issued $32.4 million of common stock under the SPP. (See Note
5 of "Notes to Financial Statements.") At year end, common equity represented
47.6 percent of total capitalization.
SHORT-TERM DEBT - The Company has PSC approval for authority to issue short-
term unsecured promissory notes not to exceed $150 million with such
authorization to expire on December 31, 1997 and has a committed bank line for
$125 million which expires on November 21, 1997. The short-term financing is
expected to be utilized to fund some of the Company's construction expenditures
until long-term financing is secured. At December 31, 1995, the Company had no
balance outstanding on this line.
LONG-TERM DEBT - On May 19, 1995, the Company sold $85 million 7.06% Series AA
FMBs due 2000 through a public offering. Net proceeds from the sale of the
bonds were used to repay approximately $70 million of indebtedness under the
Company's bank revolving credit facility, which was incurred for the purposes
of repaying the Company's $50 million 6.92% Series U FMBs due 1995 and funding
the Company's construction program. The remaining net proceeds of the Series
AA FMBs were used in connection with the Company's construction program and for
general corporate purposes.
On October 12, 1995, Clark County, Nevada issued $226.05 million in floating
rate revenue bonds (Nevada Power Company Project) consisting of $76.75 million
Series 1995A IDBs due 2030, $85 million Series 1995B refunding IDBs due 2030,
$44 million Series 1995C refunding IDBs due 2030 and $20.3 million Series 1995D
refunding pollution control revenue bonds (PCRBs) with $14 million due 2011 and
$6.3 million due 2023. Net proceeds from the sale of the Series 1995A IDBs
were placed on deposit with a trustee and will be used to finance the
construction of certain facilities which qualify for tax-exempt financing. At
December 31, 1995, $77.5 million remained on deposit with the trustee. Net
proceeds from the sale of the refunding bonds were used for the redemption of
the $44 million floating rate IDBs due 2015, $25 million floating rate IDBs due
2018, $60 million floating rate IDBs due 2019, $14 million 6 3/8% PCRBs due
2004 and $6.3 million 6 3/4% Series O FMBs due 2007 along with the related
PCRBs during the last four months of 1995. In addition, on October 12, 1995,
Coconino County, Arizona issued $13 million Series 1995E floating rate
refunding PCRBs (Nevada Power Company Project) due 2022 to redeem the $13
million 7 1/8% Series N FMBs due 2006 along with the related PCRBs in November
1995.
A discussion of long-term debt maturities, including sinking fund
requirements, is contained in Note 6 of "Notes to Financial Statements."
REGULATION
The PSC allows recovery of costs on an historical basis in setting rates
charged to customers for electrical service.
Environmental expenditures made by the Company are currently being recovered
through customer rates. Management believes environmental expenditures will
increase over time and the increased costs will also be recovered as necessary
utility expenses. A discussion of pending environmental matters is contained in
Note 8 of "Notes to Financial Statements."
PENDING RATE MATTERS - In March 1996, a hearing is set for the last phase of
the 1995 deferred energy case. The PSC Staff and Consumer Advocate Office have
filed testimony seeking the disallowance from recovery, and credit to the
Company's customers of approximately $19 million for various fuel and purchased
power issues. The Company believes its expenditures are prudent and reasonable
and will vigorously defend against the proposed disallowances. (See Note 8 of
"Notes to Financial Statements.")
CONCLUDED RATE MATTERS - On July 17, 1995, the Company filed a request with the
PSC to decrease energy rates by $20.1 million due to lower fuel costs under
the state's deferred energy accounting procedures. On September 28, 1995, the
PSC approved the rate decrease which took effect October 1, 1995. Residential
rates were reduced by $1.9 million, and other customers received the remaining
$18.2 million. On November 27, 1995, the PSC granted an additional deferred
energy rate decrease of approximately $17.1 million and a resource plan cost
recovery decrease of $500,000 which took effect December 1, 1995 and resulted
in a $7.6 million reduction in residential rates with the remaining $10 million
going to other customer classes. The new energy rates will more closely reflect
the cost of providing service to each of the customer classes.
The table below summarizes the rate adjustments that have been granted
to the Company during the past three years.
SUMMARY OF RATE ADJUSTMENTS 1993 THROUGH 1995
Effective Date Nature of Increase (Decrease) Amount (In millions)
- -------------------------------------------------------------------------
June 28, 1993 Energy and resource plan
net rate increase $ 42.1
February 1, 1994 Energy rate increase 23.6
October 1, 1994 General rate decrease (6.3)
October 1, 1995 Energy rate decrease (20.1)
December 1, 1995 Energy and resource plan (17.6)
net rate decrease
25
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
INDUSTRY RESTRUCTURING
Restructuring of the electric utility industry is accelerating with the
enactment of the National Energy Policy Act of 1992 (Act). Restructuring will
lead to further competition in the industry as generators of power obtain
greater access to transmission facilities linking them to potential new
wholesale customers. Most observers believe the electric utility beneficiaries
of the Act will be twofold: those who can provide low cost generation for sale
and those who have strategically located transmission highways that can
transmit low cost power from one area to another.
Within the region the Company's residential rates are competitive. However,
even though the bulk of the 1995 energy rate decreases was allocated to large
customers, large industrial customer rates will require further adjustment to
remain competitive in the changing environment. In January 1996, Mirage
Resorts, owner of The Mirage and Treasure Island hotels, received approval from
the Clark County, Nevada Commission for a zone variance to build a 27 megawatt
cogeneration plant to supply power to its properties. The above event and the
decision by the U. S. Department of Energy in November 1995 to choose Valley
Electric Association, a non-generating utility supplier, as the primary
electric power provider for the Nevada Test Site (NTS) indicate the need for
the Company to be able to offer more competitive prices as an incentive for
large customers to retain the Company as their primary electric service
provider. The Company will continue to be the primary electric power provider
for the NTS pending legal appeal. In recognition of the changing regional
competitive environment, the Company is focusing on the costs of serving
various classes of customers and the appropriate rates to be charged based on
those costs of service. The Company will continue to seek any rate adjustments
through the PSC necessary to maintain a competitive position.
An opportunity exists given the Company's strategic location in the center
of a region of price diversity. As generators arrange for sales of electricity
to customers in other areas, much of the power may need to be transmitted
through the Company's service territory. The Company would have an opportunity
to charge generators for the transmission of energy through its system. The
Company is studying the feasibility of constructing additional cost-effective
transmission facilities to maximize the advantage of its strategic location.
In September 1995 the PSC opened a docket to examine electric industry
restructuring issues. The PSC is soliciting opinions and analyses concerning
the potential implications of competition for various products and services
within the electric industry. The new docket is intended to supplement the
subcommittee established by the Nevada Legislature during the 1995 legislative
session to study the effects of competition in the generation, sale and
transmission of electric energy. The legislative subcommittee is expected to
make a recommendation to the Nevada Legislature in August of 1996 so the
recommendation can be reviewed before the start of the 1997 legislative
session. The PSC expects to issue a final report based on the information
obtained in the new docket in June of 1996. Both the report and the information
gathered in the new docket will be shared with the legislative subcommittee.
OTHER
During 1995, Saguaro Power Company, a cogeneration power producer, filed a
lawsuit seeking punitive damages of $75 million as a result of being curtailed
in its power deliveries under a contract with the Company during periods of low
load conditions on the Company's system, and alleging the Company refused to
accept and pay for approximately $2 million of electric energy and that the
Company should reimburse them for $2 million in construction costs. Management
cannot predict the final outcome of these matters at this time or the resulting
impact on the Company's financial position, liquidity and results of
operations. (See Note 8 of "Notes to Financial Statements.")
RESULTS OF OPERATIONS
GENERAL
In 1995, earnings decreased, as compared to 1994, due to milder weather and the
1994 recording of the settlement of the replacement power case from the 1985
Mohave Generating Station accident.
In 1994, earnings increased, as compared to 1993, due primarily to higher
revenues resulting from an increase in kilowatthour sales and settlement of the
replacement power case from the 1985 Mohave Generating Station accident.
Average shares of common stock outstanding for 1995 increased by 3.5 million
shares compared to 1994, as a result of a public offering of 2 million shares
in November of 1994 as well as the sale of shares through the SPP.
Average shares of common stock outstanding for 1994 increased by 3.3 million
shares compared to 1993, as a result of public offerings of 2 million shares in
November of 1994 and 2.7 million shares in June of 1993 as well as the sale of
shares through the SPP.
REVENUES
Revenues during 1995, 1994 and 1993 were $750 million, $764 million and $652
million, respectively. The 1.9 percent decrease in 1995, as compared to 1994,
was a result of milder weather, energy rate decreases effective October 1 and
December 1, 1995, and a general rate decrease effective October 1, 1994.
The 17.2 percent increase in 1994, as compared to 1993, was a result of a
7.1 percent increase in kilowatthour sales and an increase in energy rates
effective February 1994 and June 1993. Higher revenues also resulted from
recording unbilled revenues for the recovery of energy costs in the amount of
$11.6 million,
26
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
with an offsetting increase in the deferred energy cost adjustment and
accordingly no impact on the Company's earnings, as required by the stipulation
approved by the PSC on July 6, 1994.
INCREASE (DECREASE) IN REVENUE FROM PRIOR YEAR
Nature of Increase (Decrease) (In millions) 1995 1994 1993
- -------------------------------------------------------------------------
Kilowatthour sales $ (5.5) $73.5 $28.2
General rate changes (5.2) (1.4) 12.3
Deferred energy adjustments (3.9) 8.7 (13.3)
Fuel cost base rate changes .1 33.3 22.4
Resource plan cost changes and
other .3 (1.7) 1.3
- -------------------------------------------------------------------------
Total increase (decrease) $(14.2) $112.4 $50.9
- -----------------------------------------------==========================
FUEL AND PURCHASED POWER
Fuel expense decreased $2.5 million in 1995, as compared with 1994, primarily
due to lower average fuel rates.
In 1995, as compared to 1994, purchased power expense decreased 10.4 percent
due to reduced power purchases.
Fuel expense increased $7.3 million in 1994, as compared with 1993,
primarily due to increased generation at the Clark Station.
In 1994, as compared to 1993, purchased power expense increased 6.1 percent
due to increased purchases from qualifying facilities.
Effective October 1 and December 1, 1995, the PSC granted the Company
decreases of $20.1 million and $17.1 million, respectively, in energy rates.
Effective February 1, 1994 and June 28, 1993, the PSC granted the Company
increases of $23.6 million and $44.2 million, respectively, in the energy
portion of customer rates.
In 1995, the Company deferred $19.8 million of decreased energy costs for
refund in a later period and collected $22.9 million of energy cost increases
which had been previously deferred. During 1994 and 1993, the Company deferred
$16.8 million and $48.5 million, respectively, of increased energy costs for
collection in a later period and collected $44.7 million and $17 million,
respectively, of energy cost increases which had previously been deferred.
Recovery of fuel expenses is administered under the state's deferred energy
cost accounting procedures. (See Note 1 of "Notes to Financial Statements.")
Under the deferred energy procedure, changes in the costs of fuel and purchased
power are reflected in customer rates through annual rate adjustments and do
not affect earnings.
The following tables summarize kilowatthour data.
1995 1994 1993
- ------------------------------------------------------------------------
SOURCE OF KILOWATTHOURS SOLD
Company generation 56% 51% 49%
Hoover Dam hydroelectric 4 4 4
Purchased power 40 45 47
- --------------------------------------------------------------------
100% 100% 100%
- -------------------------------------===============================
1995 1994 1993
- ------------------------------------------------------------------------
COMPANY GENERATED KILOWATTHOURS BY FUEL SOURCE
Coal 77% 85% 93%
Natural Gas 23 15 7
Oil - - -
- --------------------------------------------------------------------
100% 100% 100%
- -------------------------------------===============================
FUEL COSTS PER KILOWATTHOUR
Coal 1.44 cents 1.55 cents 1.61 cents
Natural Gas 1.51 2.01 2.98
Oil 6.87 4.89 4.21
OTHER OPERATING EXPENSES AND TAXES
Other operations expense increased $14.0 million in 1994, as compared with
1993, primarily due to an increase in employee benefit costs and the provision
for uncollectible accounts. Employee benefit costs were higher primarily due
to increased amounts for pensions, postretirement benefits other than pensions
and amortization of reorganization, early retirement and severance costs.
The level of maintenance and repair expenses depends primarily upon the
scheduling, magnitude and number of unit overhauls at the Company's generating
stations. During 1995 these expenses decreased by $5.2 million due primarily
to lower maintenance costs at the Mohave, Navajo and Reid Gardner 4 Generating
Stations.
Depreciation expense increased $4.9 million in 1995 and $6.1 million in 1994
because of a growing electric plant asset base.
OTHER INCOME AND EXPENSES
Other miscellaneous, net includes a gain of $2.3 million net of tax in 1995 for
the sale by Nevada Electric Investment Company, the Company's unregulated
subsidiary, of certain coal mining assets.
Other miscellaneous, net includes income of $4.2 million net of tax in 1994
for the resolution of the Mohave accident replacement power case.
Other miscellaneous, net includes a charge of $3.2 million net of tax in
1993 for a write-off of costs related to engineering and environmental studies
for the canceled coal-fired White Pine Power Project. A rate decision by the
PSC on January 24, 1994, resulted in a write-off of $2 million net of tax in
1993 for previously deferred energy costs.
INTEREST DEDUCTIONS
Interest on long-term debt in 1995 increased $3.1 million as compared to 1994
due primarily to interest expense for the 7.06% Series AA FMBs issued in May
1995 and higher interest rates on the Company's floating rate IDBs.
27
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
STATEMENTS OF INCOME
For the Years Ended December 31,
(In thousands, except per share amounts) 1995 1994 1993
- --------------------------------------------------------------------------
ELECTRIC REVENUES (Note 1) $749,981 $764,158 $651,772
- --------------------------------------------------------------------------
OPERATING EXPENSES AND TAXES:
Fuel 103,582 106,040 98,701
Purchased and interchanged power 230,694 257,517 242,803
Deferred energy cost adjustments,
net (Note 1) 42,658 27,849 (31,490)
- --------------------------------------------------------------------------
Net energy costs 376,934 391,406 310,014
Other production operations 17,813 17,128 17,715
Other operations 95,458 96,251 82,300
Maintenance and repairs 33,598 38,765 35,379
Provision for depreciation (Note 1) 55,302 50,357 44,216
General taxes (Note 2) 18,946 17,051 16,401
Federal income taxes (Notes 1 and 2) 34,372 39,403 37,278
- --------------------------------------------------------------------------
632,423 650,361 543,303
- --------------------------------------------------------------------------
OPERATING INCOME 117,558 113,797 108,469
- --------------------------------------------------------------------------
OTHER INCOME (EXPENSES):
Allowance for other funds used during
construction (Note 1) 5,353 6,771 9,880
Other miscellaneous, net 996 4,317 (5,496)
- --------------------------------------------------------------------------
6,349 11,088 4,384
- --------------------------------------------------------------------------
INCOME BEFORE INTEREST DEDUCTIONS 123,907 124,885 112,853
- --------------------------------------------------------------------------
INTEREST DEDUCTIONS:
Interest on long-term debt 47,745 44,625 43,173
Other interest 1,566 2,572 1,931
Allowance for borrowed funds used
during construction (Note 1) (2,375) (4,182) (5,799)
- --------------------------------------------------------------------------
46,936 43,015 39,305
- --------------------------------------------------------------------------
NET INCOME 76,971 81,870 73,548
DIVIDEND REQUIREMENTS ON PREFERRED STOCK 3,966 3,976 3,986
- --------------------------------------------------------------------------
EARNINGS AVAILABLE FOR COMMON STOCK $ 73,005 $ 77,894 $ 69,562
- -----------------------------------------=================================
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 46,288 42,784 39,482
- -----------------------------------------=================================
EARNINGS PER AVERAGE COMMON SHARE $ 1.58 $ 1.82 $ 1.76
- -----------------------------------------=================================
See Notes to Financial Statements.
28
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
(In thousands) 1995 1994 1993
- --------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 76,971 $ 81,870 $ 73,548
Adjustments to reconcile net income
to net cash provided -
Depreciation and amortization 66,950 65,064 55,139
Deferred income taxes and
investment tax credits (15,975) 5,474 16,504
Allowance for other funds used
during construction (5,353) (6,771) (9,880)
Changes in -
Receivables 5,099 (21,516) (4,591)
Fuel stock and materials
and supplies (2,053) 2,689 5,490
Accounts payable and other
current liabilities (1,526) 1,485 27,290
Deferred energy costs 42,624 23,980 (37,766)
Accrued taxes and interest 16,784 3,801 1,868
Other assets and liabilities 2,398 (11,806) 3,343
- --------------------------------------------------------------------------
Net cash provided by operating
activities 185,919 144,270 130,945
- --------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures and
gross additions (178,770) (183,856) (163,257)
Investment in subsidiaries and other 13,555 (303) (2,828)
Salvage net of removal cost 4,387 (190) 227
- --------------------------------------------------------------------------
Net cash used in investing
activities (160,828) (184,349) (165,858)
- --------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of capital stock 33,339 75,818 107,329
Issuance of long-term debt 324,050 - 45,000
Change in funds held in trust (70,309) 51,894 6,234
Coal contract buy-out - (15,440) -
Retirement of preferred stock and
long-term debt (219,551) (7,441) (59,405)
Cash dividends (77,699) (71,688) (66,883)
Other financing activities 10,463 6,914 2,623
- --------------------------------------------------------------------------
Net cash provided by financing
activities 293 40,057 34,898
- --------------------------------------------------------------------------
CASH AND TEMPORARY CASH INVESTMENTS (Note 1):
Net increase (decrease) during the year 25,384 (22) (15)
Beginning of year 123 145 160
- --------------------------------------------------------------------------
End of year $ 25,507 $ 123 $ 145
- -----------------------------------------=================================
CASH PAID DURING THE YEAR FOR:
Interest, net of amounts capitalized $ 56,644 $ 52,074 $ 50,677
- -----------------------------------------=================================
Income taxes $ 32,885 $ 32,500 $ 18,001
- -----------------------------------------=================================
See Notes to Financial Statements.
29
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
BALANCE SHEETS
December 31, (In thousands) 1995 1994
- --------------------------------------------------------------------------
ASSETS
Electrical Plant, at Original Cost (Notes 1, 8 and 10):
Production $ 845,142 $ 765,339
Transmission 300,690 286,679
Distribution 763,103 678,260
General 127,840 101,122
- --------------------------------------------------------------------------
2,036,775 1,831,400
Less accumulated depreciation 546,803 495,691
- --------------------------------------------------------------------------
Net plant in service 1,489,972 1,335,709
Construction work in progress 129,255 159,167
Property under capital leases 79,562 85,408
Plant held for future use 2,331 3,719
- --------------------------------------------------------------------------
1,701,120 1,584,003
- --------------------------------------------------------------------------
Investments (Note 1) 9,989 21,602
- --------------------------------------------------------------------------
Current Assets:
Cash and temporary cash investments 25,507 123
Customer receivables -
Billed 44,296 46,620
Unbilled (Note 1) 22,110 25,153
Reserve for doubtful accounts (1,327) (1,395)
Other receivables 6,321 6,033
Fuel stock, at average cost 10,281 11,434
Materials and supplies, at average cost 28,429 25,223
Deferred energy costs (Note 1) (18,844) 25,714
Prepayments 8,144 9,657
- --------------------------------------------------------------------------
124,917 148,562
- --------------------------------------------------------------------------
Deferred Charges:
Debt expense, being amortized 28,373 27,316
Other (Note 9) 183,212 125,906
- --------------------------------------------------------------------------
211,585 153,222
- --------------------------------------------------------------------------
$2,047,611 $1,907,389
- ----------------------------------------------------======================
See Notes to Financial Statements.
30
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
December 31, (In thousands) 1995 1994
- --------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES
Capitalization
(See Schedules of Capitalization and Long-Term Debt):
Common shareholders' equity $ 764,361 $ 731,749
Redeemable cumulative preferred stock 38,000 38,000
Cumulative preferred stock with mandatory
sinking funds 3,863 4,064
Long-term debt 799,999 712,571
- --------------------------------------------------------------------------
1,606,223 1,486,384
- --------------------------------------------------------------------------
Current Liabilities:
Current maturities and sinking fund requirements
(See Schedules of Capitalization and
Long-Term Debt) 5,809 57,551
Accounts payable 64,518 66,467
Accrued taxes 19,457 2,493
Accrued interest 6,059 6,239
Customers' service deposits 12,964 12,954
Deferred taxes on deferred energy costs (6,595) 9,000
Other 21,641 22,809
- --------------------------------------------------------------------------
123,853 177,513
- --------------------------------------------------------------------------
Commitments and Contingencies (Note 8)
Deferred Credits and Other Liabilities:
Deferred investment tax
credits (Note 1) 32,464 33,924
Deferred taxes on income (Note 2) 215,315 135,152
Customers' advances for construction 44,903 34,896
Other (Note 9) 24,853 39,520
- --------------------------------------------------------------------------
317,535 243,492
- --------------------------------------------------------------------------
$2,047,611 $1,907,389
- ----------------------------------------------------======================
See Notes to Financial Statements.
31
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
SCHEDULES OF CAPITALIZATION
December 31, (Dollars in thousands) 1995 1994
- ------------------------------------------------------------------------------
COMMON SHAREHOLDERS' EQUITY
(Note 5):
Common stock, $1 par value,
authorized 70,000,000 shares;
issued and outstanding 47,038,193
and 45,382,370 shares at December
31, 1995 and 1994; stated at $ 50,243 $ 48,587
Premium on capital stock 600,238 568,315
Unamortized capital stock expense (4,980) (4,753)
Retained earnings 118,860 119,600
- ------------------------------------------------------------------------------
Total common shareholders' equity 764,361 47.6% 731,749 49.2%
- ------------------------------------------------------------------------------
REDEEMABLE CUMULATIVE PREFERRED
STOCK (Notes 5 and 7):
$20 par value, authorized 4,500,000 shares
for all series; Outstanding at
December 31, 1995 and 1994: 9.90%
Series, 1,900,000 shares 38,000 38,000
- ------------------------------------------------------------------------------
Total 38,000 2.4 38,000 2.6
- ------------------------------------------------------------------------------
CUMULATIVE PREFERRED STOCK WITH
MANDATORY SINKING FUNDS (Note 5):
Outstanding at December 31, 1995 and 1994:
5.40% Series, 42,669 and 44,669 shares 853 894
5.20% Series, 40,507 and 42,507 shares 810 850
4.70% Series, 120,000 and 126,000 shares 2,400 2,520
- ------------------------------------------------------------------------------
4,063 4,264
Current sinking fund requirement (200) (200)
- ------------------------------------------------------------------------------
Total 3,863 .2 4,064 0.3
- ------------------------------------------------------------------------------
LONG-TERM DEBT
(See Schedules of Long-Term Debt) 799,999 49.8 712,571 47.9
- ------------------------------------------------------------------------------
Total capitalization $1,606,223 100.0% $1,486,384 100.0%
- -------------------------------------------===================================
32
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
SCHEDULES OF LONG-TERM DEBT
December 31, (In thousands) 1995 1994
- ------------------------------------------------------------------------
LONG-TERM DEBT (Notes 6, 7 and 8):
First mortgage bonds:
7 1/8% Series I due 1998 $ 15,000 $ 15,000
7 5/8% Series L due 2002 15,000 15,000
7 1/8% Series N due 2006 - 13,000
6 3/4% Series O due 2007 - 6,700
8 3/4% Series P due 1995 - 402
7.80% Series T due 2009 15,000 15,000
6.92% Series U due 1995 - 50,000
6.70% Series V due 2022 105,000 105,000
6.60% Series W due 2019 39,500 39,500
7.20% Series X due 2022 78,000 78,000
6.93% Series Y due 1999 45,000 45,000
8.50% Series Z due 2023 45,000 45,000
7.06% Series AA due 2000 85,000 -
- ------------------------------------------------------------------------
442,500 427,602
Industrial development revenue bonds:
7.80% due 2020 100,000 100,000
Floating rate -
Series 1985 due 2015 - 44,000
Series 1988 due 2018 - 25,000
Series 1989A due 2019 - 60,000
Series 1995A due 2030 76,750 -
Series 1995B due 2030 85,000 -
Series 1995C due 2030 44,000 -
Less funds held in trust (77,467) (7,158)
Pollution control revenue bonds:
6 3/8% due 2004 - 15,000
Floating rate -
Series 1995D due 2011 14,000 -
Series 1995D due 2023 6,300 -
Series 1995E due 2022 13,000 -
Obligations under capital leases 101,533 105,522
- ------------------------------------------------------------------------
805,616 769,966
Debt premium and discount, being amortized (8) (44)
Current maturities and sinking fund requirements (5,609) (57,351)
- ------------------------------------------------------------------------
Total long-term debt $799,999 $712,571
- ------------------------------------------------------==================
33
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
STATEMENTS OF RETAINED EARNINGS
For the Years Ended December 31,
(In thousands) 1995 1994 1993
- ----------------------------------------------------------------------------
BALANCE AT BEGINNING OF YEAR $119,600 $109,359 $102,493
Add - Net Income 76,971 81,870 73,548
- ----------------------------------------------------------------------------
196,571 191,229 176,041
- ----------------------------------------------------------------------------
Deduct:
Dividends paid in cash:
Cumulative preferred stock -
5.40%, 5.20% and 4.70% Series 204 214 224
9.90% Series (Note 5) 3,762 3,762 3,762
Common stock 73,745 67,653 62,696
- ----------------------------------------------------------------------------
77,711 71,629 66,682
- ----------------------------------------------------------------------------
Balance at End of Year $118,860 $119,600 $109,359
- ----------------------------------------====================================
34
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For ratemaking and other purposes, the Company is subject to the jurisdiction
of the PSC and the Federal Energy Regulatory Commission (FERC). The accounting
records of the Company are maintained in accordance with the uniform system of
accounts prescribed by the FERC and adopted by the PSC.
ELECTRIC REVENUES - The Company bills its customers monthly on a cycle basis
and recognizes the estimated amount of revenue applicable to kilowatthours of
energy sold but not yet billed at the end of an accounting period.
DEFERRED ENERGY COST ADJUSTMENTS - As permitted by state statute, the Company
defers differences between the current cost of fuel plus net purchased power
and base energy costs as defined. Any over or under recoveries are deferred in
the balance sheet as a current asset or current liability. Under regulations
adopted by the PSC, deferred energy rates are revised at least every 12 months
to clear the accumulated deferred balance over a future period.
ELECTRIC PLANT - The costs of betterments and additions to electric plant and
replacements of retirement units of property are capitalized. Such costs
include labor, payroll taxes, material, transportation, an allowance for funds
used during construction and, where applicable, property taxes. Maintenance is
charged with the cost of repairs and minor replacements. Accumulated
depreciation is charged for the cost of plant retired, less net salvage.
Depreciation has been provided for financial statement purposes on a
straight-line basis at rates based upon the estimated useful lives of the
various classes of plant. The provisions for depreciation during 1995, 1994 and
1993 were equivalent to an annual rate of approximately 2.9 percent of the
average gross investment in depreciable plant.
ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION - The allowance for funds used
during construction (AFUDC) represents the estimated costs of borrowed and
equity funds applicable to electric plant construction.
The FERC has prescribed a specific computational method for determining the
AFUDC rate. The PSC has authorized the AFUDC rate to be the lesser of the rate
determined under the FERC computational method or the rate equivalent to the
overall rate of return authorized by the PSC. The overall rate of return
authorized by the PSC was 10.02 percent for the period January 1993 through
June 1994 and 9.66 percent beginning July 1994. The Company's actual AFUDC rate
averaged 9.66 percent, 9.73 percent and 9.88 percent for 1995, 1994 and 1993,
respectively.
RECENTLY ISSUED ACCOUNTING STANDARDS - In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121 (FAS
121), Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of which is effective for years beginning after December
15, 1995. FAS 121 established accounting standards requiring companies to
evaluate long-lived assets for potential impairment recognition if evidence
suggests a lack of recoverability. The Company has studied the provisions of
FAS 121 and believes that application of the new standard will not have a
material impact on the Company's results of operations or financial position.
FEDERAL INCOME TAXES - Effective January 1, 1993, the Company adopted the
provisions of FAS 109, Accounting for Income Taxes. FAS 109 requires
recognition of deferred tax liabilities and assets for the future tax
consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. The cumulative
effect of the change in accounting for income taxes was not material to net
income.
In November 1991, the PSC issued an order which allows the Company to
recover the previously flowed through tax benefits ratably over the
estimated remaining book life of the plant. Calculated at current rates,
approximately $36 million of income taxes will be allowed in future rates.
Investment tax credits earned have been deferred and are being amortized
to income ratably over the estimated service lives of the related property.
CASH FLOW INFORMATION - Cash equivalents, which generally are convertible to
cash at par on short notice and mature three months or less from the date of
acquisition, are reported as temporary cash investments.
The Company had no material noncash investing or financing transactions
during 1995, 1994 or 1993.
OTHER ACCOUNTING POLICIES - The Company uses the equity method of accounting to
report immaterial investments in subsidiaries.
Certain amounts in prior periods have been reclassified to conform to the
financial statement presentation for December 31, 1995.
35
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
2. FEDERAL INCOME AND OTHER TAXES
The total federal income tax expense as set forth in the accompanying
Statements of Income results in an effective federal income tax rate different
than the statutory federal income tax rate for the following reasons:
For the Years Ended December
31, (In thousands) 1995 1994 1993
- -------------------------------------------------------------------------
Federal income tax at
statutory rate $40,167 35.0% $44,305 35.0% $39,625 35.0%
Adjustments:
Investment tax credit
amortization (1,460) (1.3) (1,460) (1.2) (1,303) (1.2)
Other items (916) (.8) 1,871 1.5 1,344 1.2
- -------------------------------------------------------------------------
Total recorded federal
income tax $37,791 32.9% $44,716 35.3% $39,666 35.0%
- ----------------------------=============================================
Federal income taxes
included in:
Operating expenses $34,372 $39,403 $37,278
Other income, net 3,419 5,313 2,388
- -------------------------------------------------------------------------
$37,791 $44,716 $39,666
- ----------------------------=============================================
The current and deferred components of federal income taxes included in
operating expenses are as follows:
For the Years Ended December 31,
(In thousands) 1995 1994 1993
- ---------------------------------------------------------------------------
Current federal income taxes $50,367 $35,516 $20,680
- ---------------------------------------------------------------------------
Deferred federal income taxes:
Depreciation differences 8,323 13,134 8,899
Deferred energy costs (15,595) (11,574) 11,765
Contributions in aid of
construction (4,510) (3,028) (1,732)
Coal contract buyout (1,039) (1,039) (945)
Other - net (1,714) 7,854 (86)
- ---------------------------------------------------------------------------
(14,535) 5,347 17,901
- ---------------------------------------------------------------------------
Investment tax credit amortization (1,460) (1,460) (1,303)
- ---------------------------------------------------------------------------
Total $34,372 $39,403 $37,278
- --------------------------------------=====================================
General taxes charged to operating expenses are as follows:
For the Years Ended December 31,
(In thousands) 1995 1994 1993
- ---------------------------------------------------------------------------
Real estate and personal property $13,726 $11,853 $11,338
Payroll 4,815 4,968 4,748
Other 405 230 315
- ---------------------------------------------------------------------------
Total $18,946 $17,051 $16,401
- --------------------------------------=====================================
The Company adopted FAS 109, Accounting for Income Taxes, effective January 1,
1993. As a result, the Company's December 31, 1995 balance sheet contains a net
regulatory asset of $83 million. (See Note 9 of "Notes to Financial
Statements.")
The regulatory asset for temporary differences related to liberalized
depreciation will continue to be amortized using the average rate assumption
method required by the Tax Reform Act of 1986. The regulatory liability for
temporary differences caused by investment tax credits will be amortized
ratably in the same fashion as the deferred investment tax credit under former
Internal Revenue Code Section 46(f)(2).
The net deferred federal income tax liability consists of deferred federal
income tax liabilities less deferred federal income tax assets related to:
December 31, (In thousands) 1995 1994
- ------------------------------------------------------------------------
DEFERRED FEDERAL INCOME TAX LIABILITIES:
Temporary basis differences - plant $(101,256) $ (26,128)
Investment tax credits (32,464) (33,924)
Excess of tax depreciation over book
depreciation (105,487) (96,640)
Coal contract buyout (173) (1,212)
Accrued taxes (2,654) (1,880)
Deferred energy - (9,000)
Demand-side program costs (3,440) (4,301)
Debt reacquisition costs (2,906) (5,150)
Other 776 159
- ------------------------------------------------------------------------
Total (247,604) (178,076)
- ------------------------------------------------------------------------
DEFERRED FEDERAL INCOME TAX ASSETS:
Unamortized investment tax credits 17,481 18,267
Refundable customer advances 15,160 11,700
Deferred energy 6,595 -
Nonrefundable contributions in aid
of construction 4,852 3,705
Capitalized expenses 418 985
Supplemental executive retirement plan 2,272 1,727
Other 1,017 506
- ------------------------------------------------------------------------
Total 47,795 36,890
- ------------------------------------------------------------------------
Net deferred tax liability $(199,809) $(141,186)
- ----------------------------------------------==========================
36
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
3. EMPLOYEE BENEFITS
DEFINED CONTRIBUTION RETIREMENT PLAN - The Company maintains an employee
investment plan (401(k) Plan) which was established January 1, 1990, under
Section 401(k) of the Internal Revenue Code. Employees who are at least 21
years old and who have completed one month of service may become "participants"
in the 401(k) Plan. The Company matched 50 percent in 1995, 1994 and 1993 of
any Management, Professional, Administrative and Technical participant's
contributions to the 401(k) Plan not to exceed 3 percent of the participant's
annual compensation. In the first two months of 1994 and all of 1993, the
Company matched 25 percent of any union-represented participant's contributions
to the 401(k) Plan not to exceed 1.5 percent of the participant's annual
compensation. Effective March 1, 1994, the Company matched 50 percent of any
union-represented participant's contributions to the 401(k) Plan not to exceed
3 percent of the participant's annual compensation. All Company contributions
are invested in common stock of the Company. The amounts expensed for Company
matching contributions to the 401(k) Plan were $1,533,000 for 1995, $1,276,000
for 1994 and $921,000 for 1993.
DEFINED BENEFIT RETIREMENT PLAN - The Company has a non-contributory defined
benefit retirement plan (PLAN) designed to meet the provisions of the Employee
Retirement Income Security Act of 1974. All employees age 21 and over with one
year of service and at least 1,000 hours worked are covered by the PLAN.
Benefits under the PLAN are dependent upon each participant's salary for the
highest consecutive 60 months of service and length of service.
The Company also has a Supplemental Executive Retirement Plan (SERP) in
addition to the regular PLAN. Participation is limited to such officers as the
Board of Directors may select. Presently, 27 active or retired designated
officers and employees participate in the SERP. The SERP will be funded as
benefits are disbursed.
The table below sets forth the funded status and amounts recognized in the
Company's financial statements at December 31, 1995, 1994 and 1993 for both the
PLAN and SERP.
The discount rate and rate of increase in future compensation levels used in
determining the actuarial present value of the projected benefit obligations
for both the PLAN and SERP were 7.25 percent and 4.5 percent in 1995, 8.75
percent and 4.5 percent in 1994, and 7.25 percent and 4.5 percent in 1993,
respectively. The expected rate of return on PLAN assets was 8.5 percent in
1995, 1994 and 1993. PLAN assets are primarily invested in listed stocks, fixed
income securities and federal agencies securities.
RECONCILIATION OF FUNDED STATUS
PLAN SERP
------------------------ -----------------------
For the Years Ended
December 31, (In thousands) 1995 1994 1993 1995 1994 1993
- --------------------------------------------------------------------------
Actuarial present value of:
Vested benefit
obligation $ 72,412 $ 54,713 $54,434 $ 5,038 $ 3,202 $ 3,854
Nonvested benefit
obligation 4,702 5,235 3,875 838 2,106 514
- --------------------------------------------------------------------------
Accumulated benefit
obligation $ 77,114 $ 59,948 $58,309 $ 5,876 $ 5,308 $ 4,368
- -------------------------=================================================
Projected benefit
obligation $103,973 $ 77,601 $80,575 $ 7,063 $6,253 $ 4,837
Plan assets at fair value 74,628 57,966 60,236 - - -
- --------------------------------------------------------------------------
Plan assets less than projected
benefit obligation (29,345) (19,635)(20,339) (7,063) (6,253) (4,837)
Unrecognized net transition
obligation amortized over
approximately nine years - - - - - 129
Unrecognized prior service
costs 7,147 7,792 5,577 594 692 412
Unrecognized net loss 16,000 3,763 8,949 2,492 1,895 1,267
- --------------------------------------------------------------------------
Pension asset
(liability) $ (6,198) $(8,080)$(5,813)$(3,977)$(3,666)$(3,029)
- -------------------------=================================================
Net pension expense comprised the following:
Service cost $ 3,351 $ 3,928 $ 3,284 $ 96 $ 175 $ 67
Interest cost on projected
benefit obligation 6,947 6,576 5,243 502 498 297
Return on plan assets (14,049) 183 (5,371) - - -
Net amortization and
deferral 9,125 (4,433) 1,021 160 409 197
- --------------------------------------------------------------------------
Net periodic pension
cost $ 5,374 $ 6,254 $ 4,177 $ 758 $ 1,082 $ 561
- -------------------------=================================================
37
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS - The Company adopted Statement of
Financial Accounting Standards No. 106 (FAS 106), Employers' Accounting for
Postretirement Benefits Other Than Pensions, effective January 1, 1993. The
costs of these benefits have been expensed on a pay-as-you-go basis prior to
the Company adopting FAS 106. In July 1992, the PSC authorized the Company to
continue recognizing these benefit costs on a pay-as-you-go basis after
adopting FAS 106 and to record any difference in costs resulting from the
implementation of FAS 106 as a deferred asset. As a result of the stipulation
approved by the PSC on July 6, 1994, the Company discontinued recognizing these
benefit costs on a pay-as-you-go basis and began using the accrual method. The
Company is amortizing the FAS 106 deferred asset at March 31, 1994 over a
period of eight years. The Company has elected to amortize its transition
obligation at January 1, 1993 over a period of 20 years.
The Company provides postretirement medical, dental and vision benefits to
employees who have retired or will retire and are eligible for an immediate
pension benefit. The postretirement health care plan is contributory, and
retirees' contributions can be adjusted annually for increases in the cost of
providing the benefits. The postretirement health care plan is being funded in
amounts not to exceed the lesser of amounts collected from customers through
rates or amounts allowable under the Internal Revenue Code as amended from time
to time.
Net periodic postretirement benefit cost for the years ended December 31,
1995, 1994 and 1993 included the following components:
(In thousands) 1995 1994 1993
- --------------------------------------------------------------------------------
Service cost $ 293 $ 617 $ 614
Interest cost on projected benefit obligation 1,881 1,837 1,881
Return on assets (303) - -
Amortization of transition obligation 1,198 1,139 1,166
- --------------------------------------------------------------------------------
Net periodic postretirement benefit cost $3,069 $3,593 $3,661
- ----------------------------------------------------============================
A reconciliation of the funded status of the plan to the amounts recognized
in the Balance Sheets as of December 31, 1995 and 1994 is as follows:
(In thousands) 1995 1994
- -------------------------------------------------------------------------
Retirees $(21,936) $(14,512)
Fully eligible active employees (108) (1,879)
Other active employees (5,050) (5,642)
- -------------------------------------------------------------------------
Accumulated postretirement benefit obligation (27,094) (22,033)
Fair value of assets 4,884 -
- -------------------------------------------------------------------------
Accumulated postretirement benefit obligation
in excess of assets (22,210) (22,033)
Unrecognized transition obligation 19,817 20,983
Unrecognized (gain) loss (1,281) (5,041)
- -------------------------------------------------------------------------
Accrued postretirement benefit liability $ (3,674) $ (6,091)
- --------------------------------------------------=======================
The medical cost trend rate assumed for 1996 was 8.75 percent, grading down
to 4.75 percent in 2001 and remaining at that level thereafter. The health
care cost trend rate has a significant effect on the accumulated postretirement
benefit obligation and net periodic cost. A one-percentage-point increase in
the assumed health care cost trend rate would increase the accumulated
postretirement benefit obligation at December 31, 1995 by $1.8 million and
would increase the aggregate of the service and interest cost components of net
periodic post-retirement benefit cost for 1995 by $134,000. The weighted-
average discount rate used in determining the accumulated postretirement
benefit obligation at December 31, 1995 was 7.25 percent. The expected rate of
return on assets was 8.5 percent in 1995. Assets are primarily invested in
listed stocks, fixed income securities and federal agencies securities.
4. SHORT-TERM BORROWINGS
The Company has a $125 million bank revolving credit facility which expires
on November 21, 1997, and pays commitment fees based on both the unused amount
of the facility and the Company's first mortgage bond ratings. Borrowing rates
under the bank line are determined by both current market rates and the
Company's first mortgage bond ratings. There were no short-term borrowings
outstanding on the bank line at December 31, 1995 and 1994.
5. CAPITAL STOCK
The changes in common stock shares for 1993, 1994 and 1995 are as follows:
Shares
- --------------------------------------------------------------------------
Outstanding, December 31, 1992 37,132,817
Issued through public offering 2,700,000
Issued under 401(k) Savings Plan 32,052
Issued under Stock Purchase and Dividend Reinvestment Plan 1,640,326
- --------------------------------------------------------------------------
Outstanding, December 31, 1993 41,505,195
Issued through public offering 2,000,000
Issued under 401(k) Savings Plan 52,055
Issued under Stock Purchase and Dividend Reinvestment Plan 1,825,120
- --------------------------------------------------------------------------
Outstanding, December 31, 1994 45,382,370
Issued under 401(k) Savings Plan 77,846
Issued under Stock Purchase and Dividend Reinvestment Plan 1,577,977
- --------------------------------------------------------------------------
Outstanding, December 31, 1995 47,038,193
- ----------------------------------------------------------------==========
Premium on capital stock increased $31.9 million, $72 million and $103 million
during 1995, 1994 and 1993, respectively, due to issuances of common stock.
Cash dividends paid per share on common stock were $1.60 each year during 1995,
1994 and 1993.
38
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
On April 30, 1992, the Company issued shares of Redeemable Cumulative
Preferred Stock, 9.90% Series consisting of the previously issued shares of
Auction Preferred Stock. The Company elected to establish a 10-year dividend
period for this preferred stock, with mandatory redemption April 1, 2002. This
preferred stock is redeemable at the option of the Company, as a whole or in
part, on April 1, 1997. The dividend rate on the shares of Redeemable
Cumulative Preferred Stock, 9.90% Series was determined at an auction held on
April 23, 1992. Dividends on the shares are cumulative from April 30, 1992, and
will be payable when, as and if declared, quarterly on January 1, April 1, July
1 and October 1 of each year commencing July 1, 1992.
Under the provisions of the 4.70%, 5.20% and 5.40% series cumulative
preferred stock with mandatory sinking funds, the Company is obligated to use
its best efforts to purchase, each year, up to an aggregate of 6,000, 2,000 and
2,000 shares, respectively, at prices not in excess of $20.00 per share. The
obligations are not cumulative. The 5.20% series and 5.40% series are presently
redeemable at the option of the Company at $21.00 per share and the 4.70%
series at $20.25 per share.
In October 1990, the Company adopted a Stockholder Rights Plan and issued
through dividend to its common shareholders one stock purchase right for each
outstanding share of common stock. The rights expire in October 2000. The
rights to purchase junior preference shares, common shares or shares of a
successor corporation are not exercisable unless certain events occur and are
intended to assure fair shareholder treatment in any takeover of the Company
and to guard against abusive takeover tactics.
6. LONG-TERM DEBT
None of the long-term debt is held by or for the account of the Company.
The amounts of long-term debt maturities, including sinking fund
requirements, are $5.6 million in 1996, $5.5 million in 1997, $19.6 million in
1998, $50.1 million in 1999 and $90.3 million in 2000, including $5.3 million,
$5.2 million, $4.5 million, $4.9 million and $5.2 million for obligations under
capital leases, respectively.
Generally, electric plant is subject to the first mortgage lien. It is the
Company's intention to meet the sinking fund requirements for its series I and
L first mortgage bonds by pledging property additions in lieu of cash payments.
The series T, V, W and X first mortgage bonds correspond with respect to their
terms to two series of collateralized pollution control revenue bonds and two
series of industrial development revenue bonds issued by Clark County, Nevada.
The indentures under which the Company's first mortgage bonds were issued
provide for an immaterial restriction as to distributions to shareholders at
December 31, 1995.
The industrial development revenue bonds and pollution control revenue bonds
were issued by various municipal authorities and are guaranteed as to payment
of principal and interest by the Company.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Disclosure by the Company of the estimated fair value of financial instruments
is made in accordance with the requirements of Statement of Financial
Accounting Standards No. 107 (FAS 107), Disclosures about Fair Value of
Financial Instruments. At December 31, 1995 and 1994, the provisions of FAS 107
apply only to the Company's long-term debt and redeemable cumulative preferred
stock.
In accordance with FAS 107, the Company estimates the fair value of its
redeemable cumulative preferred stock based on the per share closing price
times the number of shares outstanding and its long-term debt based on quoted
market prices for the same or similar issues or on current interest rates
available to the Company for debt with similar terms and maturity. The book
value and estimated fair value of the redeemable cumulative preferred stock
were $38 million and $41.6 million at December 31, 1995 and $38 million and
$40.3 million at December 31, 1994, respectively. The book value and estimated
fair value of the Company's long-term debt, including current maturities and
sinking fund requirements and excluding obligations under capital leases, were
$704 million and $757 million at December 31, 1995, and $664 million and $664
million at December 31, 1994, respectively. The estimates presented herein are
not necessarily indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have an effect on the estimated fair value
amounts.
8. COMMITMENTS AND CONTINGENCIES
RATE MATTERS - The last phase of the 1995 deferred energy case is set for
hearing in March 1996 to consider the prudency of the Company's fuel and
purchased power expenditures during the period June 1993 to May 1995, a buyout
of a coal supply agreement and a credit to customers related to use of coal
reserves in an unregulated subsidiary company. The PSC Staff and Consumer
Advocate Office have filed testimony seeking disallowance from recovery and
credit to the Company's customers of approximately $19 million. The Company
believes its expenditures and use of coal reserves are prudent and reasonable
and will vigorously defend against the proposed disallowances.
LEGAL MATTERS - Saguaro Power Company (Saguaro), a cogeneration power
producer, and the Company are parties to a 30-year power purchase contract
(Contract) wherein the Company agreed to purchase power from Saguaro's plant
near Henderson, Nevada. On July 22, 1995, Saguaro filed a lawsuit in District
Court, Clark County, Nevada, seeking damages and injunctive relief as a result
of being curtailed in its power deliveries during periods of low load
conditions on the Company's system. The lawsuit alleges that the Company
refused to accept and pay for approximately $2 million of electric energy and
capacity, and that the Company should reimburse Saguaro for $2 million
39
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
related to the construction of the interconnection line. Saguaro also alleges
that the Company has refused to pay Saguaro for excess capacity. Lastly,
Saguaro alleges that the Company has committed fraud and anticipatory breach
of the Contract and requests punitive damages of $75 million. The Company
believes its actions are consistent with the Contract, federal and state
regulations, and state administrative directives, and will vigorously defend
against these claims. Further, the Company contends it has paid Saguaro all
amounts due it under the terms of the Contract.
On September 1, 1995, Las Vegas Cogeneration Limited Partnership filed a
similar lawsuit to that of Saguaro; it contends its curtailment damages are
less than $200,000.
On July 24, 1995, Nevada Cogeneration Associates #1 (NCA 1) and Nevada
Cogeneration Associates #2 (NCA 2), also cogeneration power producers, made a
request for arbitration of their current contracts relative to the same issues
of low load condition curtailments and energy and capacity payments. They
alleged under payments by the Company of approximately $2.6 million.
The Nevada District Court has recently denied the Company's request that the
issues regarding low load conditions and the lawsuits for curtailment damages
be heard before the PSC. The Nevada District Court ordered all the parties to
arbitrate the above issues with the exception of Saguaro's claim concerning
the interconnection line. The Company has appealed these decisions.
Arbitration with NCA 1 and NCA 2 proceeded as ordered and in January 1996,
the arbitrator entered an order denying most of NCA's claims. The order does
permit some damages based on the definition of a low load condition being at a
different megawatt level than either party had asserted. The Company estimates
the damages to be approximately $1 million.
The Company is involved in litigation arising in the normal course of
business. While the results of such litigation cannot be predicted with
certainty, management, based upon advice of counsel, believes that the final
outcome will not have a material adverse effect on the Company's financial
position and results of operations.
ENVIRONMENTAL MATTERS - The Federal Clean Air Act Amendments of 1990
(Amendments) include provisions for reduction of emissions of oxides of
nitrogen by establishing new emission limits for coal-fired generating units.
This will require the installation of additional pollution-control technology
at some of the Reid Gardner Station generating units before 2000 at an
estimated cost to the Company of no more than $6 million.
The Amendments also mandated creation of the Grand Canyon Visibility
Transport Commission to work toward the goal of visibility improvement in the
Grand Canyon and other national parks of the Colorado Plateau. The Commission
is expected to make recommendations to the U.S. Environmental Protection Agency
(EPA) by May 1996, regarding ways to improve visibility. A variety of actions
could be considered including imposition of more pollution controls or
emissions limitations upon large sources of pollution in the West and
Southwest. The potential affect on the Company cannot be determined at this
time.
Related to visibility, the United States Congress authorized the EPA to
study the potential impact the Mohave Generating Station (Mohave) may have on
visibility in the Grand Canyon area. Results of this study are expected in
1996. The cost of any improvements that may be required can not be determined
at this time.
The Nevada Division of Environmental Protection (NDEP) had imposed more
stringent interim stack opacity limits for Mohave. In December, at the
recommendation of NDEP, the Nevada Environmental Commission elected to retain
the interim limit as a permanent rule. Compliance with the interim rule has
been maintained and a limit more stringent than the interim standard will not
be imposed. As such, the owners of Mohave, including Nevada Power at 14
percent, will not be required to fund any additional improvements related to
opacity.
In 1991, the EPA published an order requiring the Navajo Generating Station
(Navajo) to install scrubbers to remove 90 percent of sulfur dioxide emissions
beginning in 1997. As an 11.3 percent owner of Navajo, the Company will be
required to fund an estimated $56.5 million for installation of the scrubbers.
In 1992, the Company received resource planning approval from the PSC for its
share of the cost of the scrubbers. The scrubbers are currently under
construction.
LEASES - In 1984, the Company sold its administrative headquarters facility,
less furniture and fixtures, for $27 million and entered into a 30-year capital
lease of that facility with five-year renewal options beginning in year 31. The
fixed rental obligation for the first 30 years is $5.1 million per year. Future
cash rental payments as of December 31, 1995, are as follows:
(In thousands)
- --------------------------------------------------------------------------
1996 $ 3,605
1997 3,604
1998 3,605
1999 4,880
2000 6,156
Thereafter 98,901
- --------------------------------------------------------------------------
$120,751
- ------------------------------------------------------------------========
The amount of imputed interest necessary to reduce the future cash rental
payments to present value is $76.1 million as of December 31, 1995.
Total interest expense on the lease obligation was $5.2 million and total
amortization of the leased facility was $297,000 for the year ended December
31, 1995. The total accumulated amortization of the leased facility on December
31, 1995, was $9.7 million.
At December 31, 1995, the Company has certain long-term
40
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
noncancelable operating lease agreements for which the future minimum lease
payments are immaterial.
FUEL AND PURCHASED POWER OBLIGATIONS - The Company has eight long-term
contracts for the purchase of electric energy and/or capacity. The contracts
expire in years ranging from 1997 to 2016.
Total payments under these contracts were $41.6 million, $45.4 million and
$43.1 million in 1995, 1994 and 1993, respectively. The cost of power obtained
under these contracts is included in purchased power expense in the Statements
of Income.
At December 31, 1995, the estimated future payments for capacity and energy
that the Company is obligated to purchase under these contracts, subject in
part to certain conditions, are as follows:
Accounted for Accounted for
as Long-Term as Long-Term
(In thousands) Executory Contracts Capital Lease
- ------------------------------------------------------------------------
1996 $ 35,067 $ 13,432
1997 38,566 12,902
1998 38,153 12,373
1999 29,684 11,844
2000 10,882 11,315
Thereafter - 122,472
- ------------------------------------------------------------------------
Total minimum payment $152,352 184,338
- --------------------------------------========
Less amount representing estimated executory
costs included in total minimum payment (92,272)
- ------------------------------------------------------------------------
Net minimum payments 92,066
Less amount representing interest (35,229)
- ------------------------------------------------------------------------
Present value of net minimum payments $ 56,837
- ----------------------------------------------------------------========
Total interest expense on the purchase power obligation accounted for as a
capital lease was $5.6 million and total amortization was $5.2 million in 1995.
Total accumulated amortization was $26.2 million as of December 31, 1995.
The Company has contracted with various coal suppliers to provide coal to
the Reid Gardner Generating Station. The contracts expire in years ranging from
1999 to 2007.
Costs of approximately $25.0 million, $25.9 million and $31.3 million were
incurred under the long-term coal contracts in 1995, 1994 and 1993,
respectively.
In addition, the Company has long-term transportation arrangements with
railway companies to transport coal to the Reid Gardner Generating Station.
The contracts expire in 1999 and 2000.
Costs of approximately $19.2 million, $1.7 million and $2.2 million were
incurred under the coal transportation contracts in 1995, 1994 and 1993,
respectively.
At December 31, 1995, the estimated future payments for purchase and
transportation of coal that the Company is obligated to purchase under these
contracts are as follows:
(In thousands) Coal Transportation Coal Use
- ----------------------------------------------------------------------
1996 $ 15,207 $ 15,135
1997 15,511 16,374
1998 15,821 16,702
1999 16,138 17,035
2000 12,864 14,556
Thereafter - 101,924
- ----------------------------------------------------------------------
$ 75,541 $181,726
- ---------------------------------------------========---------========
CONSTRUCTION - Certain commitments have been incurred at December 31, 1995, in
connection with the 1996 construction budget. Construction expenditures are
estimated at $186 million, excluding AFUDC, for 1996.
9. OTHER DEFERRED CHARGES AND CREDITS
OTHER DEFERRED CHARGES - At December 31, 1995, as a result of the Company
adopting FAS 109 effective January 1, 1993, other deferred charges include a
regulatory asset of $101.3 million and a deferred tax asset of $18.3 million.
The regulatory asset represents future revenue to be received from customers
due to the flow-through of tax benefits of temporary differences in prior years
and the deferred tax asset is from temporary differences caused by investment
tax credits.
At December 31, 1995, organizational study, early retirement and severance
costs of $6.0 million are included in other deferred charges and are being
amortized over an eight-year period effective February 1994. These costs are a
result of the completion of a comprehensive organizational study started in
1993.
In March 1994, the Company bought out the remaining obligation under a coal
purchase contract with Mountain Coal Co. At December 31, 1995, $15.3 million
for the Company's portion of the buyout is included in other deferred charges.
Management believes the cost of the buyout will be recovered through Nevada's
deferred energy accounting procedures.
Other deferred charges as of December 31, 1995, also include $19.9 million
for deferred federal income taxes on customer advances for construction and
$8.8 million for conservation programs.
OTHER DEFERRED CREDITS - As of December 31, 1995, a credit of $2.4 million for
generating station spare parts is included in other deferred credits. Effective
January 1992, this credit is being amortized over a six-year period.
Other deferred credits as of December 31, 1995, also include a regulatory
liability of $18.3 million representing amounts to be refunded to customers in
the future as a result of the Company adopting FAS 109.
41
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
10. INTERESTS IN JOINTLY OWNED ELECTRIC UTILITY FACILITIES
At December 31, 1995, the Company owned the following undivided interests in
jointly owned electric utility facilities:
Company's Share of
- ---------------------------------------------------------------------------
Construction
Percent Owned Plant Accumulated Net Plant Work In
(In thousands) by Company In Service Depreciation In Service Progress
- -------------------------------------------------------------------------------
FACILITY
Navajo Project 11.3 $134,994 $ 66,897 $ 68,097 $ 24,252
Mohave Project 14.0 77,206 31,369 45,837 3,461
Reid Gardner
Plant Unit No. 4 32.2 138,570 37,342 101,228 1,642
- -------------------------------------------------------------------------------
Total $350,770 $135,608 $215,162 $ 29,355
- --------------------------------===============================================
The amounts above for Navajo and Mohave include the Company's share of
transmission systems and general plant equipment and, in the case of Navajo,
the Company's share of the jointly owned railroad which delivers coal to the
plant. Each participant provides its own financing for all of these jointly
owned facilities. The Company's share of operating expenses for these
facilities is included in the corresponding operating expenses in the
Statements of Income.
11. QUARTERLY FINANCIAL DATA (UNAUDITED)
Earnings Earnings
Available per
for Average
(In thousands, except Electric Operating Net Common Common
per share amounts) Revenues Income Income Stock Share
- -------------------------------------------------------------------------------
QUARTER
1995: First $145,184 $11,642 $ 4,554 $ 3,562 $0.08
Second 173,348 23,761 13,410 12,418 0.27
Third 280,135 64,261 53,059 52,068 1.12
Fourth 151,314 17,894 5,948 4,957 .11
1994: First $144,658 $12,196 $ 4,692 $ 3,697 $0.09
Second 195,788 28,161 23,193 22,199 0.53
Third 268,359 59,697 50,472 49,479 1.16
Fourth 155,353 13,743 3,513 2,519 0.06
The business of the Company is seasonal in nature and it is management's
opinion that comparisons of earnings for the quarters do not give a true
indication of overall trends and changes in the Company's operations.
The second quarter of 1994 reflects other income of $4.2 million net of tax
or 10 cents per average common share from the resolution of the PSC
investigation of replacement power costs resulting from a 1985 accident at the
Mohave Generating Station.
42
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
Independent Auditors' Report
To the Board of Directors and Shareholders of Nevada Power Company:
We have audited the balance sheets of Nevada Power Company as of December 31,
1995 and 1994, and the related statements of income, retained earnings and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 14, 1996
REPORT OF MANAGEMENT
The management of Nevada Power Company is responsible for the financial
statements presented in this report. Management prepared the financial
statements in conformity with generally accepted accounting principles
applicable to public utilities which are consistent in all material respects
with the accounting prescribed by the Public Service Commission of Nevada and
the Federal Energy Regulatory Commission. In preparing the financial
statements, management made informed judgments and estimates relating to events
and transactions being reported.
The Company has a system of internal accounting and financial controls and
procedures in place to insure that the financial records reflect the
transactions of the Company and that assets are safeguarded. This system is
examined by management on a continuing basis for effectiveness and efficiency
and is reviewed on a regular basis by an internal audit staff that reports
directly to the Audit Committee of the Board of Directors.
The financial statements have been audited by Deloitte & Touche LLP,
independent auditors. The auditors provide an objective, independent review as
to management's discharge of its responsibilities as they relate to the
fairness of reported operating results and financial condition. Their audit
includes procedures which provide them reasonable assurance that the financial
statements are not misleading and includes a review of the Company's system of
internal accounting and financial controls and a test of transactions.
The Board of Directors has oversight responsibility for determining that
management has fulfilled its obligation in the preparation of financial
statements and the ongoing examination of the Company's system of internal
accounting controls. The Audit Committee, which is composed solely of outside
directors, meets regularly with management, Deloitte & Touche LLP and the
internal audit staff to discuss accounting, auditing and financial reporting
matters. The Audit Committee reviews the program of audit work performed by the
internal audit staff. To insure auditor independence, both Deloitte & Touche
LLP and the internal audit staff have complete and free access to the Audit
Committee.
43
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
STOCK PRICES ON NEW YORK STOCK EXCHANGE AND DIVIDENDS PER SHARE
1995 Quarters 1994 Quarters
- ------------------------------------------------------------------------------
First Second Third Fourth First Second Third Fourth
- ------------------------------------------------------------------------------
Common
High $ 21 3/8 $ 21 1/4 $ 22 1/2 $ 22 7/8 $ 24 3/8 $ 22 1/4 $ 21 1/2 $ 20 7/8
Low 19 1/4 19 5/8 19 1/8 20 7/8 21 1/4 17 1/8 18 7/8 19 1/8
Dividend
paid .40 .40 .40 .40 .40 .40 .40 .40
High and low common stock prices shown are as reported by the Wall Street
Journal as New York Stock Exchange Composite Transactions. The common stock is
also listed on the Pacific Stock Exchange.
Holders of common stock are entitled to dividends as are declared by the
Board of Directors, subject to the rights of the cumulative preferred stock and
the preference stock of the Company to quarterly cumulative dividends as
declared by the Board of Directors. The Company has paid quarterly dividends on
its common stock since August 1954. See Note 6 of "Notes to Financial
Statements" for restriction on the Company's ability to pay dividends.
The Company had 50,896 shareholders of record of common stock at December
31, 1995.
44
<PAGE>
NEVADA POWER COMPANY 1995 ANNUAL REPORT
STATISTICAL SUMMARY 1995-1991
1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------
SUMMARY OF OPERATIONS
(In thousands, except
per share amounts):
Electric Revenues:
Residential $ 319,373 $ 331,671 $ 267,941 $ 245,160 $ 216,784
Commercial and
industrial 383,080 380,223 326,006 305,707 287,407
Other electric
sales 38,700 43,732 48,504 42,011 34,459
Miscellaneous 8,828 8,532 9,321 8,037 7,761
- -----------------------------------------------------------------------------
749,981 764,158 651,772 600,915 546,411
- -----------------------------------------------------------------------------
Net Income (a) 76,971 81,870 73,548 56,780 35,176
Dividend Requirements
on Preferred Stock 3,966 3,976 3,986 4,262 2,880
Earnings Available for
Common Stock(a)$ 73,005 $ 77,894 $ 69,562 $ 52,518 $ 32,296
Weighted Average
Number of Common
Shares Outstanding 46,288 42,784 39,482 35,652 30,855
Earnings Per Average
Common Share(a)$ 1.58 $ 1.82 $ 1.76 $ 1.47 $ 1.05
Dividends Per
Common Share $ 1.60 $ 1.60 $ 1.60 $ 1.60 $ 1.60
CAPITALIZATION
(In thousands, except
per share amounts):
Long-Term Debt $ 799,999 $ 712,571 $ 716,589 $ 715,451 $ 578,540
Cumulative Preferred
Stock 38,000 38,000 38,000 38,000 38,000
Cumulative Preferred
Stock with Mandatory
Sinking Funds 3,863 4,064 4,264 4,464 4,664
Common Shareholders'
Equity 764,361 731,749 645,924 532,473 460,307
Book Value Per
Common Share $ 16.25 $ 16.12 $ 15.56 $ 14.34 $ 13.96
RETURN ON COMMON
SHAREHOLDERS'
EQUITY 9.55% 10.64% 10.77% 9.86% 7.02%
ELECTRIC PLANT INVESTMENT
(In thousands):
Gross $ 2,247,923 $ 2,079,694 $ 1,901,448 $ 1,739,633 $ 1,562,921
Depreciated 1,701,120 1,584,003 1,450,146 1,328,670 1,187,154
TOTAL ASSETS
(In thousands) $ 2,047,611 $ 1,907,389 $ 1,809,337 $ 1,557,040 $ 1,410,022
CONSTRUCTION EXPENDITURES
EXCLUDING AFUDC
(In thousands) $ 176,395 $ 179,674 $ 157,458 $ 167,233 $ 145,271
OPERATING AND SALES DATA:
Generating Capacity
and Firm Purchases
(Megawatts) 3,525 3,462 3,488 2,989 2,719
Peak Load (Megawatts) 3,066 2,920 2,681 2,501 2,373
Electric Sales
(Megawatthours) 12,109,355 11,942,724 11,155,270 10,541,204 9,834,952
Number of Customers
(Year-End) 454,166 428,286 403,875 383,036 366,325
Average Annual
Kilowatthour Sales
Per Residential
Customer 12,367 13,605 13,008 13,343 13,213
NUMBER OF EMPLOYEES
(Year-End) 1,761 1,759 1,741 1,734 1,689
(a) Amount for 1991 includes write-offs for deferred energy and environmental
study costs.
Amount for 1993 includes write-offs for deferred energy costs and
preliminary study costs for a canceled coal-fired generating station
project.
Amount for 1994 includes other income from the resolution of a regulatory
investigation of replacement power costs resulting from a 1985
generating station accident.
45
<PAGE>
<PAGE>
Series A
--------
============================================================================
FINANCING AGREEMENT
Dated as of October 1, 1995
By and Between
CLARK COUNTY, NEVADA
and
NEVADA POWER COMPANY
RELATING TO
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1995A
============================================================================
The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 3.1, 4.2(e),
4.2(g), 5.3 and 6.4 hereof and any rights of the Issuer to receive any
notices, certificates, requests, requisitions or communications hereunder)
and certain other rights of the Issuer under this Financing Agreement have
been pledged and assigned under the Indenture of Trust dated as of
October 1, 1995, between the Issuer and United States Trust Company of New
York, as Trustee.
<PAGE>
FINANCING AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference)
SECTION HEADING PAGE
ARTICLE I DEFINITIONS ............................................. 1
ARTICLE II REPRESENTATIONS ......................................... 6
Section 2.1. Representations and Covenants by the Issuer ........... 6
Section 2.2. Representations by the Company ........................ 6
ARTICLE III COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS ........ 7
Section 3.1. Agreement to Complete the Acquisition, Construction
and Equipping of the Project .......................... 7
Section 3.2. Agreement to Issue Bonds; Application of Bond Proceeds 8
Section 3.3. Disbursements from the Construction Fund .............. 8
Section 3.4. Establishment of Completion Date ...................... 9
Section 3.5. Investment of Moneys in the Bond Fund and Construction
Fund .................................................. 11
Section 3.6. Tax Exempt Status of Bonds ............................ 12
Article IV LOAN AND PROVISIONS FOR REPAYMENT ....................... 12
Section 4.1. Loan of Bond Proceeds ................................. 12
Section 4.2. Loan Repayments and Other Amounts Payable ............. 12
Section 4.3. No Defense or Set-Off ................................. 15
Section 4.4. Payments Pledged and Assigned ......................... 15
Section 4.5. Letter of Credit and Alternate Credit Facility ........ 15
Section 4.6. Payment of the Bonds and Other Amounts ................ 16
Article V SPECIAL COVENANTS AND AGREEMENTS ........................ 17
Section 5.1. Company to Maintain Its Corporate Existence;
Conditions under Which Exceptions Permitted ........... 17
Section 5.2. Annual Statement ...................................... 17
Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc ......... 17
Section 5.4. Recordation and Other Instruments ..................... 18
Section 5.5. No Warranty by the Issuer ............................. 18
Section 5.6. Agreement as to Ownership and Use of the Project ...... 18
Section 5.7. Company to Furnish Notice of Adjustments of
Interest Rate Periods ................................. 18
-i-
<PAGE>
Section 5.8. Information Reporting, Etc. ........................... 18
Section 5.9. Limited Liability of Issuer ........................... 18
Section 5.10. Inspection of Project ................................. 19
Section 5.11. Purchases of Bonds by Company or Issuer Prohibited;
Exceptions ............................................ 19
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ........................... 19
Section 6.1. Events of Default Defined ............................. 19
Section 6.2. Remedies on Default ................................... 21
Section 6.3. No Remedy Exclusive ................................... 22
Section 6.4. Agreement to Pay Fees and Expenses of Counsel ......... 22
Section 6.5. No Additional Waiver Implied by One Waiver;
Consents to Waivers ................................... 22
ARTICLE VII OPTIONS AND OBLIGATIONS OF COMPANY; PREPAYMENTS;
REDEMPTION OF BONDS ...................................... 23
Section 7.1. Option to Prepay ...................................... 23
Section 7.2. Obligation to Prepay .................................. 23
Section 7.3. Notice of Prepayment .................................. 24
ARTICLE VIII MISCELLANEOUS ............................................ 24
Section 8.1. Notices ............................................... 24
Section 8.2. Assignments ........................................... 25
Section 8.3. Severability .......................................... 25
Section 8.4. Execution of Counterparts ............................. 25
Section 8.5. Amounts Remaining in Bond Fund ........................ 25
Section 8.6. Amendments, Changes and Modifications ................. 25
Section 8.7. Governing Law ......................................... 25
Section 8.8. Authorized Issuer and Company Representatives ......... 26
Section 8.9. Term of the Agreement ................................. 26
Section 8.10. Cancellation at Expiration of Term .................... 26
Section 8.11. References to Bank and Provider ....................... 26
Signatures .............................................................. 27
EXHIBIT A - Description of the Project
-ii-
<PAGE>
Series A
--------
THIS FINANCING AGREEMENT made and entered into as of October 1, 1995,
by and between CLARK COUNTY, NEVADA, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"),
and NEVADA POWER COMPANY, a corporation duly organized and existing under
the laws of the State of Nevada, party of the second part (hereinafter
referred to as the "Company"),
WITNESSETH:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall not constitute or give rise to a
pecuniary liability or a charge upon its general credit or against its
taxing powers but shall be payable solely out of the Revenues (as
hereinafter defined) derived from this Financing Agreement and the Bonds,
as hereinafter defined):
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise. The singular shall include
the plural and the masculine shall include the feminine.
"Act" means the County Economic Development Revenue Bond Law, as
amended, contained in Sections 244A.669 to 244A.763, inclusive, of the
Nevada Revised Statutes.
"Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.
"Agreement" means this Financing Agreement by and between the Issuer
and the Company, as from time to time amended and supplemented.
"Alternate Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Alternate Credit Facility
delivered to the Trustee in connection therewith, provided in accordance
with Section 4.5 of this Agreement.
"Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such
<PAGE>
person and signed on behalf of the Company by any officer of the Company.
Such certificate may designate an alternate or alternates.
"Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished
to the Company and the Trustee containing the specimen signature of such
person and signed on behalf of the Issuer by its Chair. Such certificate
may designate an alternate or alternates.
"Bank" means Barclays Bank PLC, acting through its New York Branch, in
its capacity as issuer of the Letter of Credit, its successors in such
capacity, and its assigns. If an Alternate Credit Facility in the form of a
letter of credit has been issued and delivered in accordance with Section
4.5 of this Agreement, "Bank" shall mean the Provider of such Alternate
Credit Facility, if in the form of a letter of credit, in its capacity as
issuer of such Alternate Credit Facility, its successors in such capacity,
and its assigns.
"Bank Agent" means Barclays Bank PLC, acting through its New York
Branch, in its capacity as agent for the Bank Group, and its successors in
such capacity; provided, however, if there is no party acting as agent under
the Reimbursement Agreement, "Bank Agent" shall mean the Bank.
"Bank Group" means the banks party to the Reimbursement Agreement,
including the Bank.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978, as amended from time to time, or any substitute or replacement
legislation.
"Bond" or "Bonds" means any one or more of the bonds authorized,
authenticated and delivered under the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized
municipal bond counsel mutually acceptable to the Issuer, the Trustee, the
Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the Indenture.
"Business Day" means a day on which banks located in the city in which
the Principal Office of the Trustee is located and in the city or cities in
which any office at which any action must be instituted or taken in order to
realize upon the Letter of Credit or an Alternate Credit Facility then in
effect is or are located, are not required or authorized to remain closed
and on which the New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations promulgated or proposed thereunder.
-2-
<PAGE>
"Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee
corporation as permitted in Section 5.1 hereof.
"Completion Date" means the date of completion of the acquisition and
construction of the Project as that date shall be certified as provided in
Section 3.4 hereof.
"Construction Fund" means the fund created by Section 6.07 of the
Indenture.
"Construction Period" means the period between the beginning of
construction and equipping of the Project or the date on which the Bonds are
first delivered to the purchasers thereof, whichever is earlier, and the
Completion Date.
"Cost" or "Cost of the Project" means the items authorized to be paid
from the Construction Fund pursuant to the provisions of paragraphs (a) to
(j), inclusive, of Section 3.3 hereof.
"Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of
the United States of America or of the District of Columbia.
"Exempt Facilities" means facilities for the local furnishing of
electric energy within the meaning of Section 142(a)(8) of the Code.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all expenses (including fees of Counsel) incurred
under the Indenture and the Tax Agreement other than Ordinary Services and
Ordinary Expenses.
"First Mortgage Indenture" means that certain Indenture of Mortgage and
Deed of Trust, dated as of October 1, 1953, from Southern Nevada Power Co.
(now Nevada Power Company) to Bankers Trust Company (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), as trustee, as supplemented, modified or amended from time to
time or at any time by supplemental indentures.
"Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of
their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; lightning; earthquakes; fires;
tornadoes; volcanoes; storms; droughts; floods; explosions, breakage, or
malfunction or accident to machinery, transmission lines, pipes or canals,
even if resulting from negligence; civil disturbances; or any other cause
not reasonably within the control of the Company.
"Governing Body" means the Board of County Commissioners of the Issuer.
-3-
<PAGE>
"Hereof," "herein," "hereunder" and other words of similar import refer
to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and United States Trust Company of New York, as Trustee,
of even date herewith, pursuant to which the Bonds are authorized to be
issued, including any indentures supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy Code.
"Issuer" means Clark County, Nevada, and any successor body to the
duties or functions of the Issuer.
"Letter of Credit" means the irrevocable direct-pay Letter of Credit
issued by the Bank to the Trustee, including any extensions thereof,
contemporaneously with the issuance of the Bonds, provided that upon the
issuance and delivery of an Alternate Credit Facility in the form of a
letter of credit in accordance with Section 4.5 of this Agreement, "Letter
of Credit" shall mean such Alternate Credit Facility, if in the form of a
letter of credit, instead of the letter of credit for which such Alternate
Credit Facility has been substituted.
"Moody's" means Moody's Investors Service, Inc. a corporation organized
and existing under the laws of the State of Delaware, its successors and
their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Company and acceptable to the
Bank Agent, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered and those expenses, including fees of Counsel, normally
incurred by a trustee or paying agent under instruments similar to the
Indenture and the Tax Agreement.
"Original Purchaser" means Goldman, Sachs & Co., Lehman Brothers, Inc.,
M.R. Beal & Company and Artemis Capital Group, Inc.
"Owner" or "owner of Bonds" means the Person or Persons in whose name
or names a Bond shall be registered on books of the Issuer kept by the
Registrar for that purpose in accordance with the terms of the Indenture.
"Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.
"Project" means the facilities described in Exhibit A to this
Agreement, as it may be amended and supplemented from time to time.
"Project Certificate" means the Company's Project Certificate,
delivered concurrently with the issuance of the Bonds, with respect to
certain facts which are within the knowledge
-4-
<PAGE>
of the Company and certain reasonable assumptions of the Company, to enable
Chapman and Cutler, as Bond Counsel, to determine that interest on the Bonds
is not includable in the gross income of the Owners of the Bonds for federal
income taxes purposes.
"Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement and Section 6.21 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995, among the Company, the Bank Agent,
the Bank and the Bank Group, pursuant to which the initial Letter of Credit
is issued, and any subsequent reimbursement agreement between the Company
and a Bank pursuant to which a subsequent Letter of Credit is issued by the
Bank and delivered to the Trustee, and in each case any and all
modifications, amendments and supplements thereto.
"Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.11 of the Indenture and any permitted successor thereto.
"Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of
the following: (i) all amounts payable from time to time by the Company
under Section 4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
including all moneys drawn by the Trustee under the Letter of Credit to pay
the principal of and premium, if any, and interest on the Bonds and all
amounts realized by the Trustee from any Alternate Credit Facility to pay
the principal of and premium, if any, and interest on the Bonds, all of
which amounts are to be deposited in the Bond Fund, (ii) any portion of the
net proceeds of the Bonds deposited with the Trustee in the Bond Fund under
Section 6.03 of the Indenture and (iii) any amounts paid into the Bond Fund
from the Construction Fund, including income on investments.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of
New York, its successors and their assigns, and, if such division or
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Company and acceptable to the Bank Agent, with notice to the Trustee.
"State" means the State of Nevada.
"Tax Agreement" means the Tax Exemption Certificate and Agreement with
respect to the Bonds, dated the date of the delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.
"Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.
-5-
<PAGE>
"Trustee" means United States Trust Company of New York, as trustee
under the Indenture and any successor trustee appointed pursuant to Section
10.06 or 10.09 of the Indenture at the time serving as successor Trustee
thereunder, and any separate or co-trustee serving as such thereunder.
All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE ISSUER. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing political
subdivision of the State. Under the provisions of the Act, the Issuer
is authorized to enter into the transactions contemplated by this
Agreement, the Indenture and the Tax Agreement and to carry out its
obligations hereunder and thereunder. The Issuer has duly authorized
the execution and delivery of this Agreement, the Indenture and the Tax
Agreement.
(b) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's interests in this
Agreement and the Revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned as security for payment of the
principal of, premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that the issuance
of the Bonds will further the public purposes of the Act.
(d) The Issuer has not assigned and will not assign any of its
interests in this Agreement other than pursuant to the Indenture.
(e) No member of the Governing Body of the Issuer, nor any other
officer of the Issuer, has any interest, financial, employment or
other, in the Company or in the transactions contemplated hereby.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Company is a corporation duly incorporated under the laws
of the State and is in good standing in the State, is qualified to do
business as a foreign corporation in all other states and jurisdictions
wherein the nature of the business transacted by the Company or the
nature of the property owned or leased by it makes
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such licensing or qualification necessary, has power to enter into and
by proper corporate action has been duly authorized to execute and
deliver this Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the
Tax Agreement, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any corporate restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes a
default under any of the foregoing, or results in the creation or
imposition of any lien, charge or encumbrance whatsoever upon any of
the property or assets of the Company under the terms of any instrument
or agreement other than the Indenture.
(c) The statements, information and descriptions contained in the
Project Certificate and the Tax Agreement, as of the date hereof and at
the time of the delivery of the Bonds to the Original Purchaser, are
and will be true, correct and complete, do not and will not contain any
untrue statement or misleading statement of a material fact, and do not
and will not omit to state a material fact required to be stated
therein or necessary to make the statements, information and
descriptions contained therein, in the light of the circumstances under
which they were made, not misleading, and the estimates and the
assumptions contained in the Project Certificate and the Tax Agreement,
as of the date hereof and as of the date of issuance and delivery of
the Bonds, are and will be reasonable and based on the best information
available to the Company.
ARTICLE III
COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO COMPLETE THE ACQUISITION, CONSTRUCTION AND
EQUIPPING OF THE PROJECT. The Company agrees that it will complete or cause
to be completed the acquisition, construction and equipping of the Project
with such reasonable dispatch as it shall deem prudent in the conduct of its
affairs, and that the Project, while operated by the Company, as herein
provided, will at all times be a "project" within the meaning of the Act and
be Exempt Facilities.
Exhibit A hereto may be amended or supplemented by the Company from
time to time, to add to or remove from the Project any item or interest
therein or to change the nature of all or any part of the facilities
constituting the Project, provided that there shall be delivered by the
Company to the Issuer and the Trustee in connection with any such amendment
or supplement:
(i) a certificate of the Authorized Company Representative
describing the proposed changes and stating that they will not have the
effect of disqualifying the Project as a "project" within the meaning
of the Act or as Exempt Facilities;
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(ii) a copy of the amendment or supplement to Exhibit A hereto and
such other documents, certificates and showings as may be required by
Counsel rendering the opinion in clause (iii) of this paragraph; and
(iii) an opinion of Bond Counsel to the effect that such
amendment complies with the requirements of this Section 3.1 and is in
proper form for execution and delivery by the Issuer and that the
exemption from federal income taxes of interest on the Bonds is not
adversely affected by reason of such amendment and the changes in the
Project contemplated thereby.
SECTION 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
In order to provide funds to lend to the Company to finance the Cost of the
Project as provided in Section 4.1 hereof, the Issuer agrees that it will
issue under the Indenture, sell and cause to be delivered to the Original
Purchaser thereof, its Bonds in the aggregate principal amount of
$76,750,000, bearing interest and maturing as set forth in the Indenture.
The Issuer will thereupon deposit the proceeds received from the sale of the
Bonds as follows: (1) in the Bond Fund, a sum equal to any accrued interest
paid by the Original Purchaser of the Bonds; and (2) in the Construction
Fund, the balance of the proceeds (net of underwriting discount) from the
sale of the Bonds.
SECTION 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The Issuer
will in the Indenture authorize and direct the Trustee to disburse the
moneys in the Construction Fund to or on behalf of the Company, upon
compliance with Section 6.07 of the Indenture, for the following purposes
(but, subject to the provisions of Section 3.5 hereof, for no other
purpose):
(a) Payment to the Company of such amounts, if any, as shall be
necessary to reimburse the Company in full for all advances and
payments made by it at any time prior to or after the delivery of the
Bonds for expenditures in connection with the preparation of plans and
specifications for the Project (including any preliminary study or
planning of the Project or any aspect thereof) and the acquisition,
construction and equipping of the Project.
(b) Payment of the initial or acceptance fees, if any, of the
Trustee, the Application Fee, the Closing Fee and the Administrative
Expenses of the Issuer, bond insurance premium, legal and accounting
fees and expenses and printing and engraving costs incurred in
connection with the authorization, sale and issuance of the Bonds and
the preparation of this Agreement, the Indenture, the Tax Agreement,
the Bonds and all other documents in connection with the authorization,
sale and issuance of the Bonds.
(c) Payment for labor, services, materials and supplies used or
furnished in site improvement and in the construction and equipping of
the Project and miscellaneous expenditures incidental to any of the
foregoing items.
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(d) Payment of the fees, if any, for architectural, engineering,
legal, underwriting and supervisory services with respect to the
Project.
(e) Payment of the premiums on all insurance required to be taken
out and maintained in connection with the Project during the
Construction Period.
(f) Payment of the taxes, assessments and other charges, if any,
that may become payable during the Construction Period with respect to
the Project.
(g) Payment of expenses incurred in seeking to enforce any remedy
against any contractor or subcontractor or any other third party in
respect of any default under a contract relating to the Project.
(h) Interest on the Bonds and Letter of Credit fees during the
construction of the Project, but only to the extent provided by the
Project Certificate.
(i) Payment of interest on the Bonds during the construction of
the Project, but only to the extent provided by the Project
Certificate.
(j) Payment of any other costs which constitute a part of the
Cost of the Project in accordance with generally accepted applicable
accounting principles, which are permitted by the Act and which will
not adversely affect the exemption from federal income taxes of
interest on any of the Bonds.
The Company covenants and agrees that it will not take any action or
authorize or permit, to the extent such action is within its control, any
action to be taken which would cause the interest on the Bonds to become
includable in the federal gross income of the Owners of the Bonds, provided
that the Company shall not have violated this covenant if the interest on
any of the Bonds becomes includable in the federal gross income of an Owner
or a beneficial owner who is a "substantial user" of the Project or a
"related person" within the meaning of Section 147(a) of the Code. The
Company further covenants and agrees to comply with all of the requirements
and restrictions of the Project Certificate.
SECTION 3.4. ESTABLISHMENT OF COMPLETION DATE. Except as provided in
the next succeeding paragraph, as soon as practicable after the completion
of the acquisition and construction of the Project, and in any event not
more than 90 days thereafter, the Company shall furnish to the Trustee a
certificate signed by the Authorized Company Representative stating (i) that
the acquisition and construction of the Project has been completed, (ii) the
Completion Date, (iii) the Cost of the Project, (iv) the portion of the Cost
of the Project which has then been paid, and (v) the portion of the Cost of
the Project which has not yet been paid. A copy of such certificate shall
be furnished to the Issuer. Such certificate may state that it is given
without prejudice to any rights against third parties which exist at the
date of such certificate or which may subsequently come into being.
It is anticipated by the Issuer and the Company that all moneys
deposited in the Construction Fund, including income from the investment
thereof, will be disbursed to pay
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part of the Cost of the Project prior to the delivery of such certificate,
and the Issuer will provide in the Indenture that in such event the
Construction Fund will automatically terminate and the filing of a
certificate pursuant to the provisions of the next preceding paragraph need
not be made. However, if any moneys should remain in the Construction Fund
at the time such certificate is required to be delivered to the Trustee
pursuant to the provisions of the next preceding paragraph, such moneys may
be used, at the direction of the Authorized Company Representative, to the
extent indicated, for one or more of the following purposes:
(1) for the payment, in accordance with the provisions of this
Agreement and the Project Certificate, of any Cost of the Project not
then paid, as specified in the above-mentioned certificate; or
(2) for transfer to the Bond Fund, but only if, and to the extent
that, the Trustee and the Issuer have been furnished with an opinion of
Bond Counsel to the effect that such transfer is lawful under
applicable law and does not adversely affect the exemption from federal
income taxes of interest on any of the Bonds.
Any moneys (including investment proceeds) remaining in the
Construction Fund on the date of the aforesaid certificate and not set aside
for the payment of the Cost of the Project as specified in (1) above or
transferred to the Bond Fund pursuant to (2) above shall on such date be
placed by the Trustee in a separate escrow account and used to pay all or
part of the redemption price of Bonds at the redemption date or dates
selected by the Company (or to reimburse the Bank Group for the payment of
such redemption price with a drawing under the Letter of Credit); provided
that, until so used such moneys may also be used, at the direction of the
Company, for one or more of the following purposes:
(a) to pay all or part of the price of purchasing Bonds on
tender, in the open market or at private sale, on or before such
date or dates, for the purpose of cancellation;
(b) to pay all or part of the principal of and interest on
the Bonds coming due on or before such date or dates;
(c) for the payment of the costs of any additional Exempt
Facilities;
(d) for transfer to the Rebate Fund; or
(e) for any other purpose;
provided that, no moneys on deposit in such escrow account may be used for
any of the purposes specified in this paragraph (including the redemption of
Bonds) unless and until the Trustee and the Issuer have been furnished with
an opinion of Bond Counsel to the effect that such use is lawful under
applicable law and does not adversely affect the exemption from federal
income taxes of interest on any of the Bonds; and provided further that,
until used for one or more of the foregoing purposes, moneys on deposit in
such escrow account
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may be invested in investments authorized by the first paragraph of Section
3.5 of this Agreement pursuant to the written direction, or the oral
direction promptly confirmed in writing, of an Authorized Company
Representative, but may not be invested to produce a yield on such moneys
(computed from the Completion Date and taking into account any investment of
moneys during the period from the Completion Date until such moneys were
deposited in such escrow account) greater than the yield on the Bonds, all
as such terms are used in and determined in accordance with Section 148(a)
of the Code.
SECTION 3.5. INVESTMENT OF MONEYS IN THE BOND FUND AND CONSTRUCTION
FUND. Except as otherwise herein provided, any moneys held as a part of the
Bond Fund or the Construction Fund shall be invested or reinvested by the
Trustee at the written direction, or the oral direction promptly confirmed
in writing, of an Authorized Company Representative as to specific
investments, to the extent permitted by law, in:
(a) bonds or other obligations of the United States of America;
(b) bonds or other obligations, the payment of the principal of
and interest on which is unconditionally guaranteed by the United
States of America;
(c) obligations issued or guaranteed as to principal and interest
by any agency or person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(d) obligations issued or guaranteed by any state of the United
States of America, or any political subdivision of any such state, or
in funds consisting of such obligations to the extent described in
Treasury Regulation 1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by commercial
banks;
(h) repurchase agreements fully secured by obligations issued or
guaranteed as to principal and interest by the United States of America
or by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(i) certificates of deposit issued by commercial banks, including
banks domiciled outside of the United States of America; and
(j) units of taxable government money market portfolios composed
of obligations guaranteed as to principal and interest by the United
States of America or repurchase agreements fully collateralized by
such obligations.
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The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the Bond Fund or Construction Fund, as the
case may be, and the interest accruing thereon and any profit realized
therefrom shall be credited to such fund, subject to the provisions of the
Tax Agreement. The Company agrees that to the extent any moneys in the Bond
Fund represent moneys realized under the Letter of Credit or any Alternate
Credit Facility or moneys held for the payment of Bonds pursuant to Sections
6.12 and 6.18 of the Indenture or moneys held for the payment of the
purchase price of Bonds pursuant to Article IV of the Indenture, such
moneys shall not be invested. In addition, the Company agrees that to the
extent that any moneys in the Bond Fund represent moneys to be used to pay
the premium portion of the redemption price of Bonds pursuant to Section
3.01(A)(3) of the Indenture, such moneys shall be invested only in
Governmental Obligations maturing on or before the applicable redemption
date or dates.
SECTION 3.6. TAX EXEMPT STATUS OF BONDS. The Company covenants and
agrees that it has not taken or permitted and will not take or permit any
action which results in interest paid on the Bonds being included in gross
income of the holders or beneficial owners of the Bonds for purposes of
federal income taxation (other than a holder or beneficial owner who is a
"substantial user" of the Project or a "related person" within the meaning
of Section 147(a) of the Code). The Company covenants that none of the
proceeds of the Bonds or the payments to be made under this Agreement, or
any other funds which may be deemed to be proceeds of the Bonds pursuant to
Section 148(a) of the Code, will be invested or used in such a way, and that
no actions will be taken or not taken, as to cause the Bonds to be treated
as "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Without limiting the generality of the foregoing, the Company covenants and
agrees that it will comply with the provisions of the Tax Agreement and the
Project Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale
of the Bonds in order to pay the Cost of the Project and the Company agrees
to apply the gross proceeds of such loan to pay the Cost of the Project or
as otherwise permitted in Section 3.4 hereof.
(b) The Issuer and the Company expressly reserve the right to enter
into, to the extent permitted by law, an agreement or agreements other than
this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to pay the Cost of the Project or to refund all or any
principal amount of the Bonds, or any combination thereof.
SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE. (a) On each
date provided in or pursuant to the Indenture for the payment (whether at
maturity or upon redemption or acceleration) of principal of, and premium,
if any, and interest on, the Bonds,
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until the principal of, and premium, if any, and interest on, the Bonds
shall have been fully paid or provision for the payment thereof shall have
been made in accordance with the Indenture, the Company shall pay to the
Trustee in immediately available funds, for deposit in the Bond Fund, as a
repayment installment of the loan of the proceeds of the Bonds pursuant to
Section 4.1(a) hereof, a sum equal to the amount payable on such date
(whether at maturity or upon redemption or acceleration) as principal of,
and premium, if any, and interest on, the Bonds as provided in the
Indenture; provided, however, that the obligation of the Company to make
any such payment shall be deemed to be satisfied and discharged to the
extent of the corresponding payment realized by the Trustee under the Letter
of Credit or any Alternate Credit Facility; and provided further, that the
obligation of the Company to make any such repayment installment shall be
reduced by the amount of any moneys then on deposit in the Bond Fund and
available for such payment.
(b) The Company shall pay to the Trustee amounts equal to the amounts
to be paid by the Trustee for the purchase of Bonds pursuant to Article IV
of the Indenture. Such amounts shall be paid by the Company to the Trustee
in immediately available funds on the date such payments pursuant to Section
4.05 of the Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or under any Alternate Credit Facility or
to the extent moneys are available from the sources described in clauses (i)
and (ii) of Section 4.05(a) of the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees of the
Trustee for the Ordinary Services rendered by it and an amount equal to the
Ordinary Expenses incurred by it under the Indenture and the Tax Agreement,
as and when the same become due, and (ii) the reasonable fees, charges and
expenses of the Trustee for reasonable Extraordinary Services and
Extraordinary Expenses, as and when the same become due, incurred under the
Indenture and the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable for, and
agrees that it will at all times indemnify and hold harmless the Trustee,
its officers, agents, servants and employees against, and pay all expenses
of the Trustee, its officers, agents, servants and employees, relating to
any lawsuit, proceeding or claim and resulting from any action or omission
taken or made by or on behalf of the Trustee, its officers, agents, servants
and employees pursuant to this Agreement, the Indenture or the Tax
Agreement, that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in
respect of which indemnity may be sought against the Company, the Trustee
shall promptly notify the Company in writing and the Company shall be
entitled to assume control of the defense thereof, including the employment
of Counsel and the payment of all expenses. The Trustee shall have the
right to employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such
action without its consent, but if any such action is settled with the
consent of the Company or if there be final judgment for the plaintiff in
any such action, the Company agrees to indemnify and hold harmless the
Trustee from and
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against any loss or liability by reason of such settlement or final
judgment. The Company agrees that the indemnification provided herein shall
survive the termination of this Agreement or the Indenture or the
resignation of the Trustee.
(d) The Company agrees to pay all costs incurred in connection with
the issuance of the Bonds (which may be paid from the proceeds of the Bonds
to the extent permitted by the Project Certificate) and the Issuer shall
have no obligation with respect to such costs.
(e) The Company agrees to indemnify and hold harmless the Issuer and
any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement, the Indenture or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds. The
Company agrees to pay the Issuer its Closing Fee in connection with the
issuance of the Bonds in the amount of $10,000. The Issuer may submit to
the Company periodic statements, not more frequently than monthly, for its
Administrative Expenses and the Company shall make payment to the Issuer of
the full amount of each such statement within 30 days after the Company
receives such statement.
(f) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent, and the Issuer shall
have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
(g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid and the Company will pay interest to the extent
permitted by law, on any overdue amount at the rate of interest borne by the
Bonds on the date on which such amount became due and payable until paid.
In the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same
with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to
its prime commercial borrowers until paid.
(h) To the extent that the Letter of Credit is in effect and moneys on
deposit in the Bond Fund constitute Available Moneys or have been deposited
in separate, segregated accounts in the Bond Fund for the purpose of
becoming Available Moneys, such moneys shall not be available for transfer
and shall not be transferred from the Bond Fund to the Rebate Fund to
satisfy the requirements of the Tax Agreement (unless the Company fails to
pay the amounts described below). In the event that moneys are not
available for transfer from the Bond Fund to the Rebate Fund as required by
the Tax Agreement, the Company agrees to pay any such amount required to be
so transferred and not available for such purpose in the Bond Fund by paying
such amount to the Trustee for deposit directly into the Rebate Fund. The
obligation of the Company set forth in this Section 4.2(h) shall survive the
termination of this Agreement.
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SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and
unconditional without defense or set-off by reason of any default by the
Issuer under this Agreement or under any other agreement between the Company
and the Issuer or for any other reason, it being the intention of the
parties that the payments required hereunder will be paid in full when due
without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is understood and
agreed that all payments required to be made by the Company pursuant to
Section 4.2 hereof (except payments made to the Trustee pursuant to Section
4.2(c) hereof, to the Remarketing Agent pursuant to Section 4.2(f) hereof,
to the Issuer pursuant to Section 4.2(e) hereof and to any or all the Issuer
and the Trustee and the Remarketing Agent pursuant to Section 4.2(g) hereof)
and certain rights of the Issuer hereunder are pledged and assigned by the
Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to
be paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent pursuant to Section 4.2(f) hereof and payments to be made
to the Issuer pursuant to Sections 4.2(e) and (g) hereof. The Project will
not constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND ALTERNATE CREDIT FACILITY. (a) The
Company shall arrange for a Letter of Credit or an Alternate Credit Facility
to be in effect at all times with such terms and conditions as required
under Sections 6.19 and 6.20 of the Indenture. Such Letter of Credit or
Alternate Credit Facility must be delivered to the Trustee by the Company
not later than 10:30 a.m., New York time, on the fifth Business Day
preceding the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms.
(b) At any time the Company may, at its option, provide for the
delivery to the Trustee of an Alternate Credit Facility. The Alternate
Credit Facility (a) may consist, at the option of the Company, of (i) first
mortgage bonds of the Company, (ii) a letter of credit, or (iii) such other
security or credit support as the Company may elect to furnish and which is
acceptable to the Issuer, in each case in an amount and having terms
sufficient to support the payment of the principal of and interest on all
Bonds then outstanding and, at the election of the Company, any of its other
obligations under this Agreement, (b) shall have administrative provisions
satisfactory to the Trustee, and (c) shall be for a stated term and shall
not be terminable prior to the end of such term except by action of the
Trustee at the direction of the Company upon the fulfillment of any
requirements of such Alternate Credit Facility and compliance with the
conditions set forth in Section 4.5(c) hereof. The Company shall have an
option, at any time, and from time to time, upon notice given as provided in
Section 4.5(c) hereof, to provide an Alternate Credit Facility in
substitution for the Letter of Credit or another Alternate Credit Facility,
but only in accordance with the provisions of this Section 4.5(b) and
Section 4.5(c) hereof.
(c) As a condition to the exercise by the Company of its option set
forth in Section 4.5(b) hereof to deliver an Alternate Credit Facility,
the Company shall provide to the Issuer, the Trustee and the Remarketing
Agent, at least 20 days prior to the fifth Business
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Day next preceding the effective date of such change, a notice specifying
(i) that the Letter of Credit or the Alternate Credit Facility then in
effect will be changed, (ii) the effective date of such change (which must
be at least five Business Days prior to the date the then existing Letter of
Credit or Alternate Credit Facility is to expire by its terms), (iii) the
form and substance of the Letter of Credit or the Alternate Credit Facility
then in effect, and (iv) the form and substance of the Alternate Credit
Facility to be in effect on the date specified in (ii) above. Such notice
to the Trustee must be accompanied by the opinion of Bond Counsel required
by Sections 6.19 and 6.20 of the Indenture and (i) a letter from Moody's, if
the Bonds should then be rated by Moody's, and from S&P, if the Bonds should
then be rated by S&P, to the effect that the substitution of the proposed
Alternate Credit Facility for the Letter of Credit or the Alternate Credit
Facility then in effect will not by itself result in a reduction, suspension
or withdrawal of its ratings of the Bonds which then prevail (except that
such rating evidence shall not be required if the Bonds are subject to
mandatory tender for purchase pursuant to Section 4.02(a)(iii) of the
Indenture), and (ii) the form of the substitute Alternate Credit Facility to
be in place on the effective date of such change, together with any
documentation and opinions referred to by Moody's or S&P in any such letter.
(d) The Issuer and the Company agree that the Issuer will in the
Indenture authorize and direct the Trustee to accept and agree to conditions
and provisions of the Letter of Credit and any Alternate Credit Facility
which may be provided in accordance with the provisions of this Section 4.5.
SECTION 4.6. PAYMENT OF THE BONDS AND OTHER AMOUNTS. The Bonds and
interest and premium, if any, thereon shall be payable solely from (i)
payments made by the Company to the Trustee under Section 4.2(a) hereof,
(ii) amounts realized under the Letter of Credit or any Alternate Credit
Facility and (iii) other moneys on deposit in the Bond Fund and available
therefor.
Payments of principal of, and premium, if any, or interest on, the
Bonds with moneys in the Bond Fund or the Construction Fund constituting
proceeds from the sale of the Bonds or earnings on investments made under
the provisions of the Indenture shall be credited against the obligation to
pay required by Section 4.2(a) hereof, and the obligation to pay required by
Section 4.2(a) hereof shall be deemed to be satisfied and discharged to the
extent of the corresponding payment made to the Trustee under the Letter of
Credit or any Alternate Credit Facility.
Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same
upon the request of the Company and such redemption (unless conditional)
shall be made from payments made by the Company to the Trustee under Section
4.2(a) hereof and amounts realized under the Letter of Credit or any
Alternate Credit Facility equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the
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Indenture (whether at maturity or upon redemption or acceleration or upon
provision for payment in accordance with Article VIII of the Indenture),
payments shall be deemed paid to the extent such payment or provision
therefor has been made and is considered to be a payment of principal of,
or premium, if any, or interest on, such Bonds. If such Bonds are thereby
deemed paid in full, the Trustee shall notify the Company and the Issuer
that such payment requirement has been satisfied. Subject to the foregoing,
or unless the Company is entitled to a credit under this Agreement or the
Indenture, all payments shall be in the full amount required by Section
4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Company agrees that during the term
of this Agreement, it will maintain its corporate existence and its good
standing in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation unless (a) the acquirer of its assets or the corporation
with which it shall consolidate or into which it shall merge shall (i) be a
corporation organized under the laws of one of the states of the United
States of America, (ii) be qualified to do business in the State, (iii) be a
public utility, and (iv) assume in writing all of the obligations of the
Company under this Agreement and the Tax Agreement.
Any transfer of all or substantially all of the Company's assets to any
of its wholly owned subsidiaries shall not be deemed to constitute a
"disposition of all or substantially all of the Company's assets" within
the meaning of the preceding paragraph. Any such transfer of the Company's
assets shall not relieve the Company of any of its obligations under this
Agreement.
SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have an annual
audit made by its regular independent certified public accountants and to
furnish the Trustee (within 30 days after receipt by the Company) with a
balance sheet and statement of income and surplus showing the financial
condition of the Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Company and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
a report of said accountants that such statements have been prepared in
accordance with generally accepted accounting principles. The Company's
obligations under this Section 5.2 may be satisfied by delivering a copy of
the Company's Annual Report to the Trustee at the same time that it is
mailed to stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; Etc. The
Company shall maintain or cause to be maintained the Project in good repair
and keep it properly insured and shall promptly pay or cause to be paid all
costs thereof. The Company shall promptly pay or cause to be paid all
installments of taxes, installments of special assessments, and all
governmental, utility and other charges with respect to the Project, when
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due. The Company may, at its own expense and in its own name in good faith
contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or
other charges, or installments thereof, to remain unpaid if such nonpayment
shall subject the Project or any part thereof to loss or forfeiture.
SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS. The Company shall
cause such security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to time to be
kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve, protect and perfect the security
of the Owners of the Bonds and the rights of the Trustee and, after payment
in full of the Bonds as provided in the Indenture, the rights of the Bank
Group provided in the Indenture, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.04 of the Indenture to the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for
the purposes of the Company or needs of the Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT. The
Issuer and the Company agree that title to the Project shall be in and
remain in the Company, and that the Project shall be the sole property of
the Company in which the Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and
to the extent set forth in Section 2.03 of the Indenture. In the event the
Company elects to exercise any such option, the Company agrees that it shall
cause notices of adjustments of Rate Periods (or rescissions thereof) to be
given to the Issuer, the Trustee and the Remarketing Agent in accordance
with Section 2.03(a), (b), (c), (d) or (f) of the Indenture.
SECTION 5.8. INFORMATION REPORTING, ETC.. The Issuer covenants and
agrees that, upon the direction of the Company or Bond Counsel, it will mail
or cause to be mailed to the Secretary of the Treasury (or his designee as
prescribed by regulation, currently the Internal Revenue Service Center,
Philadelphia, PA 19255) a statement setting forth the information required
by Section 149(e) of the Code, which statement shall be in the form of the
Information Return for Tax-Exempt Private Activity Bond Issues (Form 8038)
of the Internal Revenue Service (or any successor form) and which shall be
completed by the Company and Bond Counsel based in part upon information
supplied by the Company and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise
incurred in connection with the issuance of the Bonds (including without
limitation any liability created by or arising out of the representations,
warranties or covenants set forth herein or otherwise) shall not
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impose a debt or pecuniary liability upon the Issuer or the State or any
political subdivision thereof, or a charge upon the general credit or taxing
powers of any of the foregoing, but shall be payable solely out of the
Revenues or other amounts payable by the Company to the Issuer hereunder or
otherwise (including without limitation any amounts derived from
indemnifications given by the Company).
Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the
State or any political subdivision thereof to levy any form of taxation
therefor or to make any appropriation for their payment. Nothing in the
Bonds or in the Indenture or this Agreement or the proceedings of the Issuer
authorizing the Bonds or in the Act or in any other related document shall
be construed to authorize the Issuer to create a debt of the Issuer or
the State or any political subdivision thereof within the meaning of any
constitutional or statutory provision of the State. The principal of, and
premium, if any, and interest on, the Bonds shall be payable solely from
the funds pledged for their payment in accordance with the Indenture and
available therefor under this Agreement, the Letter of Credit and any
Alternate Credit Facility. Neither the State nor any political subdivision
thereof shall in any event be liable for the payment of the principal of,
premium, if any, or interest on, the Bonds or for the performance of any
pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or
agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit
or against the taxing power of the Issuer or the State or any political
subdivision thereof.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that the
Issuer and the Trustee and their duly authorized representatives shall have
the right at all reasonable times to enter upon and examine and inspect the
Project property and shall also be permitted, at all reasonable times, to
examine the books and records of the Company insofar as they relate to the
Project.
SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while the Letter of Credit is in effect, the
Company shall not and shall not allow any Insider of the Company to purchase
any Bonds except (a) with Available Moneys or (b) as provided in Section
4.2(b) hereof. At any time while the Letter of Credit is in effect, the
Issuer shall not and shall not allow any Insider of the Issuer to purchase
any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Agreement and the terms "event of default" or
"default" shall mean, whenever they are used in this Agreement, any one or
more of the following events:
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(a) Failure by the Company to pay when due any amounts required
to be paid under Section 4.2(a) hereof, which failure results in an
event of default under subparagraph (a) or (b) of Section 9.01 of
the Indenture; or
(b) Failure by the Company to pay or cause to be paid any
payment required to be paid under Section 4.2(b) hereof, which failure
results in an event of default under subparagraph (c) of Section 9.01
of the Indenture; or
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in
Section 4.5(a) of this Agreement, including without limitation failure
by the Company to provide the Trustee with a Letter of Credit or
Alternate Credit Facility on or before 10:30 a.m., New York time, on
the fifth Business Day preceding the date the then existing Letter of
Credit or Alternate Credit Facility is to expire; or
(d) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) and (c) above, for a
period of 90 days after written notice, or in the case of failure by
the Company to observe and perform any covenant, condition or agreement
on its part to be observed or performed in Section 4.2(h) hereof, for a
period of 30 days after written notice, specifying such failure and
requesting that it be remedied and stating that such notice is a
"Notice of Default" hereunder, given to the Company by the Trustee or
to the Company and the Trustee by the Issuer, unless the Issuer and the
Trustee shall agree in writing to an extension of such time prior to
its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, the Issuer and the
Trustee will not unreasonably withhold their consent to an extension of
such time if corrective action is instituted within the applicable
period and diligently pursued until the failure is corrected and such
corrective action or diligent pursuit is evidenced to the Trustee by a
certificate of an Authorized Company Representative; or
(e) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction seeking (i) liquidation, reorganization, dissolution,
winding-up or composition or adjustment of debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and
such proceeding or cause shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered against the
Company in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or
(f) The Company shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in
voluntary bankruptcy or shall make any general assignment for the
benefit of its creditors, or shall consent to the appointment
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of a receiver or trustee of all or substantially all of its property,
or shall commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of competent
jurisdiction a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or shall fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under such Bankruptcy Code or
other applicable law; or
(g) Dissolution or liquidation of the Company; provided that the
term "dissolution or liquidation of the Company" shall not be construed
to include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.1 hereof; or
(h) The occurrence of an "event of default" under the Indenture.
The foregoing provisions of Section 6.1(d) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole
or in part to carry out its agreements on its part herein contained, other
than the obligations on the part of the Company contained in Article IV and
Sections 5.3 and 6.4 hereof, the Company shall not be deemed in default
during the continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within
the discretion of the Company and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is
in the sole judgment of the Company unfavorable to the Company.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company, declare the
unpaid indebtedness under Section 4.2(a) hereof to be due and payable
immediately, if concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and
payable, and upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in the Bond
Fund, to pay the unpaid principal of, premium, if any, and interest
accrued on, the Bonds) shall become and shall be immediately due and
payable as liquidated damages; and
(b) may take whatever action at law or in equity as may appear
necessary or desirable to collect the payments and other amounts then
due and thereafter to become
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due hereunder or to enforce performance and observance of any
obligation, agreement or covenant of the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance with the provisions of the Indenture.
No action taken pursuant to this Section 6.2 shall relieve the Company from
the Company's obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the
Company as such, either directly or through the Company, under any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under the second paragraph of Section
3.1 hereof and under Sections 4.2(e), 4.2(g), 5.3 and 6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Issuer or the Trustee
to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein
expressly required. Subject to the provisions of the Indenture and hereof,
such rights and remedies as are given the Issuer hereunder shall also extend
to the Trustee. The Owners of the Bonds, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ Counsel or incur other
expenses for the collection of the indebtedness hereunder or the enforcement
of performance or observance of any obligation or agreement on the part of
the Company herein contained, the Company agrees that it will on demand
therefor pay to the Trustee, the Issuer or, if so directed by the Issuer, to
the Counsel for the Issuer, the reasonable fees of such Counsel and such
other expenses so incurred by or on behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. No waiver shall be effective
unless in writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company without
both
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the consent of the Trustee and the Bank to such waiver. The Trustee and the
Bank shall have the power to waive any default by the Company hereunder,
except a default under the second paragraph of Section 3.1 hereof, or under
Section 3.6, 4.2(e), 4.2(g), 5.3 or 6.4 hereof, in so far as it pertains to
the Issuer, without the prior written concurrence of the Issuer.
Notwithstanding the foregoing, if, after the acceleration of the maturity of
the outstanding Bonds by the Trustee pursuant to Section 9.02 of the
Indenture, (i) all arrears of principal of and interest on the outstanding
Bonds and interest on overdue principal and (to the extent permitted by law)
on overdue installments of interest at the rate of interest borne by the
Bonds on the date on which such principal or interest became due and payable
and the premium, if any, on all Bonds then Outstanding which have become due
and payable otherwise than by acceleration, and all other sums payable under
the Indenture, except the principal of and the interest on such Bonds which
by such acceleration shall have become due and payable, shall have been
paid, (ii) all other things shall have been performed in respect of which
there was a default, (iii) there shall have been paid the reasonable fees
and expenses of the Trustee and of the Owners of such Bonds, including
reasonable attorneys' fees paid or incurred and (iv) such event of default
under the Indenture shall be waived in accordance with Section 9.09 of the
Indenture with the consequence that such acceleration under Section 9.02 of
the Indenture is rescinded, then the Company's default hereunder shall be
deemed to have been waived and its consequences rescinded and no further
action or consent by the Trustee or the Issuer or the Bank shall be
required; provided that there has been furnished an opinion of Bond Counsel
to the effect that such waiver will not adversely affect the exemption from
federal income taxes of interest on the Bonds.
ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part
at any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to
provide for the defeasance of the Bonds pursuant to Article VIII of the
Indenture. In the event the Company elects to provide for the redemption of
Bonds as permitted by this Section, the Company shall notify and instruct
the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in advance of maturity. If the Company so elects, any
redemption of Bonds pursuant to Section 3.01(A) of the Indenture may be made
conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for
redemption in accordance with the Indenture or become subject to mandatory
redemption, it will prepay the indebtedness hereunder in whole or in part,
prior to the date on which notice of such redemption is given to the owners
of such Bonds, in an amount sufficient to redeem such Bonds on the date
fixed for the redemption of the Bonds.
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SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of
the Bonds in accordance with Section 3.01(B) of the Indenture, the Company
shall give written notice to the Issuer, the Bank, the Remarketing Agent and
the Trustee. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the retirement of the Bonds
in whole or in part pursuant to call for redemption and shall be given by
the Company not less than 35 days prior to the date of the redemption which
is to occur as a result of such prepayment (or such later date as is
acceptable to the Trustee and the Issuer), and in the case of a redemption
of Bonds pursuant to Section 3.01(B) of the Indenture shall be given on a
date which will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for redemption of
the Bonds or portions thereof, there shall be deposited with the Trustee
from drawings upon the Letter of Credit or payments by the Company or from
amounts realized under any Alternate Credit Facility as required by Section
7.1 or 7.2, as appropriate, for payment into the Bond Fund. Any other
provision of this Agreement or the Indenture to the contrary
notwithstanding, any prepayment of moneys hereunder shall be made in such
manner and at such time that any redemption of Bonds or portions thereof
will be made with Available Moneys.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be
sufficiently given if in writing and shall be deemed given when mailed by
first class mail, postage prepaid, or by qualified overnight courier
service, courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: If to the Issuer, at 500 South
Grand Central Parkway, 6th Floor (89106), P.O. Box 551601, Las Vegas, Nevada
89155-1601, or to telecopy number (702) 455-3558, Attention: County Manager;
if to the Company, at P.O. Box 230, 6226 West Sahara Avenue, Las Vegas,
Nevada 89151, or to telecopy number (702) 367-5629, Attention: Treasurer; if
to the Trustee, at 114 West 47th Street, New York, New York 10036-1532 or
to telecopy number (212) 852-1625, Attention: Corporate Trust
Administration; if to the Remarketing Agent, at 3 World Financial Center,
Eighth Floor, 200 Vesey Street, New York, New York 10285, Attention: Short-
Term Municipal Department, or to telecopy number (212) 528-0821; if to the
Bank or the Bank Agent, at 75 Wall Street, New York, New York 10265,
Attention: Trade Services Group, or to telecopy number (212) 412-5111. In
case by reason of the suspension of regular mail service, it shall be
impracticable to give notice by first class mail of any event to the Issuer,
to the Company, to the Remarketing Agent, to the Bank or to the Bank Agent
when such notice is required to be given pursuant to any provisions of this
Agreement, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be sufficient giving of such notice. The
Issuer, the Company, the Trustee, the Remarketing Agent, the Bank and the
Bank Agent may, by notice pursuant to this Section 8.1, designate any
different addresses to which subsequent notices, certificates or other
communications shall be sent.
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SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by
either party without consent of the other and the Bank or the Bank Agent,
except that the Issuer shall assign to the Trustee its rights under this
Agreement (except under the second paragraph of Section 3.1 and under
Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as provided by Section 4.4
hereof, and the Company may assign its rights under this Agreement to any
transferee or any surviving or resulting corporation as provided by Section
5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by the
parties hereto that after payment in full of (i) the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), (ii) the fees, charges and expenses of the Trustee in accordance
with the Indenture, (iii) the Administrative Expenses, (iv) the fees and
expenses of the Remarketing Agent and the Issuer and (v) all other amounts
required to be paid under this Agreement and the Indenture, any amounts
remaining in the Bond Fund shall belong to and be paid to the Company by the
Trustee; provided, however, that if there remain reimbursement or other
obligations of the Company under the Reimbursement Agreement, such moneys
remaining in the Bond Fund shall, subject to Section 13.10(b) of the
Indenture, be paid by the Trustee to the Bank Agent upon written direction
of the Bank Agent to such extent.
SECTION 8.6. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee and the Bank thereto is obtained. Subject to the
written consent of the Trustee and the Bank, the Issuer and the Company
agree to enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this Agreement or the
Indenture, (ii) for the purpose of curing any ambiguity, formal defect or
omission in this Agreement, (iii) so as to add additional rights acquired in
accordance with the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or any of
them, or (v) in connection with any other change herein which is not to the
prejudice of the Trustee, the Bank or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely
and only out of funds provided or to be provided by the Company) or
surrender or abdicate in whole or in part any of its essential governmental
functions or powers or any of its discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
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SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Company is required to take some action at the request of the other, such
approval of such request shall be given for the Issuer by the Authorized
Issuer Representative and for the Company by the Authorized Company
Representative, and the other party hereto and the Trustee shall be
authorized to act on any such approval or request and neither party hereto
shall have any complaint against the other or against the Trustee as a
result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from its date to and including such date as all of the
Bonds issued under the Indenture shall have been fully paid or retired (or
provision for such payment shall have been made as provided in the
Indenture), provided that all representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds and
the covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f),
4.2(g) and 4.2(h) hereof shall survive the termination of this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of
all other fees and charges having been made in accordance with the
provisions of this Agreement and the Indenture, the Issuer shall deliver to
the Company any documents and take or cause the Trustee to take such actions
as may be necessary to effectuate the cancellation and evidence the
termination of this Agreement.
SECTION 8.11. REFERENCES TO BANK AND PROVIDER. At any time that the
Letter of Credit (and if at such time there shall be no Pledged Bonds) or
any Alternate Credit Facility is not in effect and the Bank Group shall have
been paid all amounts owed them under the Reimbursement Agreement (as
evidenced by a written certificate of the Bank Agent delivered to the
Trustee to such effect), all references herein to the Bank or the Bank Agent
or the Bank Group or the Provider, as the case may be, shall be deemed
ineffective. Any provisions hereof requiring the consent of the Bank or the
Bank Agent or the Bank Group or the Provider shall be deemed ineffective if
the Bank or the Provider is at any such time in default in its obligations
under the Letter of Credit or the Alternate Credit Facility, as the case may
be, to fund a drawing thereunder made in strict compliance with the terms of
such Letter of Credit or Alternate Credit Facility.
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IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By YVONNE ATKINSON GATES
-------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
LORETTA BOWMAN
- ------------------------------------
County Clerk
NEVADA POWER COMPANY
By
-------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
- ------------------------------------
Secretary
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By
-------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
- ------------------------------------
County Clerk
NEVADA POWER COMPANY
By STEVEN W. RIGAZIO
-------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
RICHARD L. HINCKLEY
- ------------------------------------
Secretary
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<PAGE>
Series A
--------
EXHIBIT A
(Attached to Financing Agreement between Clark County, Nevada and Nevada
Power Company, dated as of October 1, 1995).
The Project consists of the following facilities, all as more
particularly described in the Project Certificate and only to the extent
provided in the Project Certificate:
Additions and improvements to the Local Distribution System which
consists of the low-voltage electric distribution facilities by which the
Company furnishes electric energy to customers within its retail customer
service area, together with additions and improvements to the Company's
other plant, property and equipment for use in connection therewith for the
same purpose, including but not limited to poles, conductors, transformers,
circuit-breakers, meters, customer service connections, and related
substations, switchyards, controls, communications equipment, and related
land, land-rights, structures, improvements, equipment and other facilities
necessary or useful for the operation, maintenance, control or protection of
the following.
<PAGE>
<PAGE>
Series B
--------
============================================================================
FINANCING AGREEMENT
Dated as of October 1, 1995
By and Between
CLARK COUNTY, NEVADA
and
NEVADA POWER COMPANY
RELATING TO
INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1995B
============================================================================
The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g),
5.3 and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and
certain other rights of the Issuer under this Financing Agreement have been
pledged and assigned under the Indenture of Trust dated as of October 1,
1995, between the Issuer and United States Trust Company of New York, as
Trustee.
<PAGE>
FINANCING AGREEMENT
-------------------
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference).
SECTION HEADING PAGE
ARTICLE I DEFINITIONS ............................................ 1
ARTICLE II REPRESENTATIONS ........................................ 6
Section 2.1. Representations and Covenants by the Issuer .......... 6
Section 2.2. Representations by the Company ....................... 7
ARTICLE III ISSUANCE OF THE BONDS .................................. 7
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds ............................................. 7
Section 3.2. Deposit of Additional Funds by Company; Redemption
of Prior Bonds ....................................... 8
Section 3.3. Investment of Moneys in the Bond Fund and the
Prior Bonds Redemption Fund .......................... 8
Section 3.4. Tax Exempt Status of Bonds ........................... 9
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT ...................... 9
Section 4.1. Loan of Bond Proceeds ................................ 9
Section 4.2. Loan Repayments and Other Amounts Payable ............ 10
Section 4.3. No Defense or Set-Off ................................ 11
Section 4.4. Payments Pledged and Assigned ........................ 12
Section 4.5. Letter of Credit and Alternate Credit Facility ....... 12
Section 4.6. Payment of the Bonds and Other Amounts ............... 13
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS ....................... 14
Section 5.1. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted .......... 14
Section 5.2. Annual Statement ..................................... 14
Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc. ....... 14
Section 5.4. Recordation and Other Instruments .................... 14
Section 5.5. No Warranty by the Issuer ............................ 15
Section 5.6. Agreement as to Ownership and Use of the Project ..... 15
Section 5.7. Company to Furnish Notice of Adjustments of
Interest Rate Periods ................................ 15
Section 5.8. Information Reporting, Etc. .......................... 15
Section 5.9. Limited Liability of Issuer .......................... 15
Section 5.10. Inspection of Project ................................ 16
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<PAGE>
Section 5.11. Purchases of Bonds by Company or Issuer Prohibited;
Exceptions ........................................... 16
Article VI EVENTS OF DEFAULT AND REMEDIES ......................... 16
Section 6.1. Events of Default Defined ............................ 16
Section 6.2. Remedies on Default .................................. 18
Section 6.3. No Remedy Exclusive .................................. 18
Section 6.4. Agreement to Pay Fees and Expenses of Counsel ........ 19
Section 6.5. No Additional Waiver Implied by One Waiver;
Consents to Waivers .................................. 19
Article VII OPTIONS AND OBLIGATIONS OF COMPANY; PREPAYMENTS;
REDEMPTION OF BONDS .................................... 20
Section 7.1. Option to Prepay ..................................... 20
Section 7.2. Obligation to Prepay ................................. 20
Section 7.3. Notice of Prepayment ................................. 20
Article VIII MISCELLANEOUS .......................................... 21
Section 8.1. Notices .............................................. 21
Section 8.2. Assignments .......................................... 21
Section 8.3. Severability ......................................... 21
Section 8.4. Execution of Counterparts ............................ 21
Section 8.5. Amounts Remaining in Bond Fund ....................... 21
Section 8.6. Amendments, Changes and Modifications ................ 22
Section 8.7. Governing Law 22 .................................... 22
Section 8.8. Authorized Issuer and Company Representatives ........ 22
Section 8.9. Term of the Agreement ................................ 22
Section 8.10. Cancellation at Expiration of Term ................... 22
Section 8.11. References to Bank and Provider ...................... 23
Signature ............................................................... 24
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<PAGE>
THIS FINANCING AGREEMENT made and entered into as of October 1, 1995,
by and between CLARK COUNTY, NEVADA, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"),
and NEVADA POWER COMPANY, a corporation duly organized and existing under
the laws of the State of Nevada, party of the second part (hereinafter
referred to as the "Company"),
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall not constitute or give rise to a
pecuniary liability or a charge upon its general credit or against its
taxing powers but shall be payable solely out of the Revenues (as
hereinafter defined) derived from this Financing Agreement and the Bonds, as
hereinafter defined):
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise. The singular shall include
the plural and the masculine shall include the feminine.
"Act" means the County Economic Development Revenue Bond Law, as
amended, contained in Sections 244A.669 to 244A.763, inclusive, of the
Nevada Revised Statutes.
"Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.
"Agreement" means this Financing Agreement by and between the Issuer
and the Company, as from time to time amended and supplemented.
"Alternate Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Alternate Credit Facility
delivered to the Trustee in connection therewith, provided in accordance
with Section 4.5 of this Agreement.
"Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such person and signed on behalf of the
Company by any officer of the Company. Such certificate may designate an
alternate or alternates.
<PAGE>
"Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished
to the Company and the Trustee containing the specimen signature of such
person and signed on behalf of the Issuer by its Chair. Such certificate
may designate an alternate or alternates.
"Bank" means Societe Generale, acting through its Los Angeles Branch,
in its capacity as issuer of the Letter of Credit, its successors in such
capacity, and its assigns. If an Alternate Credit Facility in the form of a
letter of credit has been issued and delivered in accordance with Section
4.5 of this Agreement, "Bank" shall mean the Provider of such Alternate
Credit Facility, if in the form of a letter of credit, in its capacity as
issuer of such Alternate Credit Facility, its successors in such capacity,
and its assigns.
"Bank Agent" means Societe Generale, acting through its Los Angeles
Branch, in its capacity as agent for the Bank Group, and its successors in
such capacity; provided, however, if there is no party acting as agent under
the Reimbursement Agreement, "Bank Agent" shall mean the Bank.
"Bank Group" means the banks party to the Reimbursement Agreement,
including the Bank.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978, as amended from time to time, or any substitute or replacement
legislation.
"Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02 of
the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized
municipal bond counsel mutually acceptable to the Issuer, the Trustee, the
Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the Indenture.
"Business Day" means a day on which banks located in the city in which
the Principal Office of the Trustee is located and in the city or cities in
which any office at which any action must be instituted or taken in order to
realize upon the Letter of Credit or an Alternate Credit Facility then in
effect is or are located, are not required or authorized to remain closed
and on which the New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations promulgated or proposed thereunder.
"Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee
corporation as permitted in Section 5.1 hereof.
"Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law
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<PAGE>
before the highest court of any state of the United States of America or of
the District of Columbia.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all expenses (including fees and expenses of Counsel)
incurred under the Indenture and the Tax Agreement other than Ordinary
Services and Ordinary Expenses.
"First Mortgage Indenture" means that certain Indenture of Mortgage and
Deed of Trust, dated as of October 1, 1953, from Southern Nevada Power Co.
(now Nevada Power Company) to Bankers Trust Company (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), as trustee, as supplemented, modified or amended from time to
time or at any time by supplemental indentures.
"Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of
their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; lightning; earthquakes; fires;
tornadoes; volcanoes; storms; droughts; floods; explosions, breakage, or
malfunction or accident to machinery, transmission lines, pipes or canals,
even if resulting from negligence; civil disturbances; or any other cause
not reasonably within the control of the Company.
"Governing Body" means the Board of County Commissioners of the Issuer.
"Hereof," "herein," "hereunder" and other words of similar import refer
to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and United States Trust Company of New York, as Trustee,
of even date herewith, pursuant to which the Bonds are authorized to be
issued, including any indentures supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy Code.
"Issuer" means Clark County, Nevada, and any successor body to the
duties or functions of the Issuer.
"Letter of Credit" means the irrevocable direct-pay Letter of Credit
issued by the Bank to the Trustee, including any extensions thereof,
contemporaneously with the issuance of the Bonds, provided that upon the
issuance and delivery of an Alternate Credit Facility in the form of a
letter of credit in accordance with Section 4.5 of this Agreement, "Letter
of Credit" shall mean such Alternate Credit Facility, if in the form of a
letter of credit, instead of the letter of credit for which such Alternate
Credit Facility has been substituted.
"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized
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<PAGE>
securities rating agency designated by the Company and acceptable to the
Bank Agent, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered and those expenses including fees and expenses of Counsel,
normally incurred by a trustee or paying agent under instruments similar to
the Indenture and the Tax Agreement.
"Original Purchaser" means Goldman, Sachs & Co., Lehman Brothers, Inc.,
M. R. Beal & Company and Artemis Capital Group, Inc.
"Owner" or "owner of Bonds" means the Person or Persons in whose name
or names a Bond shall be registered on books of the Issuer kept by the
Registrar for that purpose in accordance with the terms of the Indenture.
"Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.
"Prior Bonds" means the Series 1988 Bonds and the Series 1989A Bonds.
"Project" means the Series 1988 Project and the Series 1989A Project.
"Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with
respect to certain facts which are within the knowledge of the Company and
certain reasonable assumptions of the Company, to enable Chapman and Cutler,
as Bond Counsel, to determine that interest on the Bonds is not includable
in the gross income of the Owners of the Bonds for federal income taxes
purposes.
"Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement and Section 6.16 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995, among the Company, the Bank Agent,
the Bank and the Bank Group, pursuant to which the initial Letter of Credit
is issued, and any subsequent reimbursement agreement between the Company
and a Bank pursuant to which a subsequent Letter of Credit is issued by the
Bank and delivered to the Trustee, and in each case any and all
modifications, amendments and supplements thereto.
"Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.11 of the Indenture and any permitted successor thereto.
"Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of
the following: (i) all amounts payable from time to time by the Company
under Section 4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
including all moneys drawn by the Trustee under the Letter of Credit to pay
the principal of and premium, if any, and interest on the Bonds and all
amounts realized by the Trustee from any Alternate Credit Facility to pay
the principal of and premium, if any, and
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<PAGE>
interest on the Bonds, all of which amounts are to be deposited in the Bond
Fund, and (ii) any portion of the net proceeds of the Bonds deposited with
the Trustee in the Bond Fund under Section 6.03 of the Indenture.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of
New York, its successors and their assigns, and if such division or
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Company and acceptable to the Bank Agent, with notice to the Trustee.
"Series 1988 Agreement" means the Financing Agreement, dated as of
November 1, 1988, between the Issuer and the Company relating to the Series
1988 Bonds.
"Series 1988 Bonds" means the Issuer's Floating Rate Weekly Demand
Industrial Development Revenue Bonds (Nevada Power Company Project)
Series 1988, currently outstanding in the aggregate principal amount of
$25,000,000.
"Series 1988 Bond Fund" means the fund established pursuant to Section
602 of the Series 1988 Indenture.
"Series 1988 Indenture" means the Indenture of Trust, dated as of
November 1, 1988, between the Issuer and the Series 1988 Trustee, pursuant
to which the Series 1988 Bonds were issued.
"Series 1988 Project" means the "Project" as defined in the Series 1988
Agreement.
"Series 1988 Trustee" means United States Trust Company of New York, as
trustee under the Series 1988 Indenture.
"Series 1989A Agreement" means the Financing Agreement, dated as of
April 1, 1989, between the Issuer and the Company, relating to the Series
1989A Bonds.
"Series 1989A Bonds" means the Issuer's Floating Rate Weekly Demand
Industrial Development Revenue Bonds (Nevada Power Company Project) Series
1989A, currently outstanding in the aggregate principal amount of
$60,000,000.
"Series 1989A Bond Fund" means the fund established pursuant to Section
602 of the Series 1989A Indenture.
"Series 1989A Indenture" means the Indenture of Trust, dated as of
April 1, 1989, between the Issuer and Series 1989A Trustee, pursuant to
which the Series 1989A Bonds were issued.
"Series 1989A Project" means the "Project" as defined in the Series
1989A Agreement.
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<PAGE>
"Series 1989A Trustee" means United States Trust Company of New York,
as trustee under the Series 1989A Indenture.
"State" means the State of Nevada.
"Tax Agreement" means the Tax Exemption Certificate and Agreement with
respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.
"Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.
"Trustee" means United States Trust Company of New York, as Trustee
under the Indenture, and any successor Trustee appointed pursuant to Section
10.06 or 10.09 of the Indenture at the time serving as Trustee thereunder,
and any separate or co-trustee serving as such thereunder.
All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE ISSUER. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing political
subdivision of the State of Nevada. Under the provisions of the Act,
the Issuer is authorized to enter into the transactions contemplated by
this Agreement, the Indenture and the Tax Agreement and to carry out
its obligations hereunder and thereunder. The Issuer has duly
authorized the execution and delivery of this Agreement, the Indenture
and the Tax Agreement.
(b) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's interests in this
Agreement and the Revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned as security for payment of the
principal of, premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that the issuance
of the Bonds will further the public purposes of the Act.
(d) The Issuer has not assigned and will not assign any of its
interests in this Agreement other than pursuant to the Indenture.
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<PAGE>
(e) No member of the Governing Body of the Issuer, nor any other
officer of the Issuer, has any interest, financial, employment or
other, in the Company or in the transactions contemplated hereby.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Company is a corporation duly incorporated under the laws
of the State and is in good standing in the State, is qualified to do
business as a foreign corporation in all other states and jurisdictions
wherein the nature of the business transacted by the Company or the
nature of the property owned or leased by it makes such licensing or
qualification necessary, has power to enter into and by proper
corporate action has been duly authorized to execute and deliver this
Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the
Tax Agreement, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any corporate restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes a
default under any of the foregoing, or results in the creation or
imposition of any lien, charge or encumbrance whatsoever upon any of
the property or assets of the Company under the terms of any instrument
or agreement other than the Indenture.
(c) The statements, information and descriptions contained in the
Project Certificate and the Tax Agreement, as of the date hereof and at
the time of the delivery of the Bonds to the Original Purchaser, are
and will be true, correct and complete, do not and will not contain any
untrue statement or misleading statement of a material fact, and do not
and will not omit to state a material fact required to be stated
therein or necessary to make the statements, information and
descriptions contained therein, in the light of the circumstances under
which they were made, not misleading.
ARTICLE III
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
In order to provide funds to lend to the Company to refund the Prior Bonds
as provided in Section 4.1 hereof, the Issuer agrees that it will issue
under the Indenture, sell and cause to be delivered to the Original
Purchaser thereof, its Bonds in the aggregate principal amount of
$85,000,000, bearing interest and maturing as set forth in the Indenture.
The Issuer will thereupon deposit the proceeds received from the sale of the
Bonds as follows: (1) in the Bond Fund, a sum equal to any accrued interest
paid by the Original Purchaser of the Bonds; and (2) $85,000,000 of the
proceeds from the sale of the Bonds in the Prior Bonds Redemption Fund to be
remitted by the Trustee as follows: (a) $25,000,000 of the proceeds from
the sale of the Bonds to the Series 1988 Trustee for deposit in the Series
1988 Bond Fund to be used to pay to the owners thereof the principal of the
Series 1988 Bonds upon redemption thereof; and (b)
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<PAGE>
$60,000,000 of the proceeds from the sale of Bonds to the Series 1989A
Trustee for deposit in the Series 1989A Bond Fund to be used to pay to the
owners thereof the principal of the Series 1989A Bonds upon redemption
thereof.
SECTION 3.2. DEPOSIT OF ADDITIONAL FUNDS BY COMPANY; REDEMPTION OF
PRIOR BONDS. The Company covenants that such additional amounts as may be
required to redeem the Series 1988 Bonds and the Series 1989A Bonds will be
deposited with the Series 1988 Trustee and the Series 1989A Trustee, as the
case may be, pursuant to the Series 1988 Indenture and the Series 1989A
Indenture, as the case may be, for such purpose. Income derived from the
investment of the proceeds of the Bonds deposited in the Prior Bonds
Redemption Fund will be used, pro rata, to satisfy the obligations of the
Company specified in this Section 3.2 in connection with the Series 1988
Bonds and the Series 1989A Bonds. The Company covenants that it will cause
the Prior Bonds to be redeemed within 90 days after the issuance and
delivery of the Bonds.
SECTION 3.3. INVESTMENT OF MONEYS IN THE BOND FUND AND THE PRIOR BONDS
REDEMPTION FUND. Except as otherwise herein provided, any moneys held as a
part of the Bond Fund and the Prior Bonds Redemption Fund shall be invested
or reinvested by the Trustee at the written direction, or the oral direction
promptly confirmed in writing, of an Authorized Company Representative as to
specific investments, to the extent permitted by law, in:
(a) bonds or other obligations of the United States of America;
(b) bonds or other obligations, the payment of the principal of
and interest on which is unconditionally guaranteed by the United
States of America;
(c) obligations issued or guaranteed as to principal and interest
by any agency or person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(d) obligations issued or guaranteed by any state of the United
States of America, or any political subdivision of any such state, or
in funds consisting of such obligations to the extent described in
Treasury Regulation 1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by commercial
banks;
(h) repurchase agreements fully secured by obligations issued or
guaranteed as to principal and interest by the United States of America
or by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
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<PAGE>
(i) certificates of deposit issued by commercial banks, including
banks domiciled outside of the United States of America; and
(j) units of taxable government money market portfolios composed
of obligations guaranteed as to principal and interest by the United
States of America or repurchase agreements fully collateralized by such
obligations.
The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the
interest accruing thereon and any profit realized therefrom shall be
credited to such fund, subject to the provisions of the Tax Agreement. The
Company agrees that to the extent any moneys in the Bond Fund represent
moneys realized under the Letter of Credit or any Alternate Credit Facility
or moneys held for the payment of Bonds pursuant to Sections 6.07 and 6.13
of the Indenture or moneys held for the payment of the purchase price of
Bonds pursuant to Article IV of the Indenture, such moneys shall not be
invested. In addition, the Company agrees that to the extent that any
moneys in the Bond Fund represent moneys to be used to pay the premium
portion of the redemption price of Bonds pursuant to Section 3.01(A)(3) of
the Indenture such moneys shall be invested only in Governmental Obligations
maturing on or before the applicable redemption date or dates.
SECTION 3.4. TAX EXEMPT STATUS OF BONDS. The Company covenants
and agrees that it has not taken or permitted and will not take or permit
any action which results in interest paid on the Bonds being included in
gross income of the holders or beneficial owners of the Bonds for purposes
of federal income taxation (other than a holder or beneficial owner who is a
"substantial user" of the Project or a "related person" within the meaning
of Section 147(a) of the Code). The Company covenants that none of the
proceeds of the Bonds or the payments to be made under this Agreement, or
any other funds which may be deemed to be proceeds of the Bonds pursuant to
Section 148(a) of the Code, will be invested or used in such a way, and that
no actions will be taken or not taken, as to cause the Bonds to be treated
as "arbitrage Bonds" within the meaning of Section 148(a) of the Code.
Without limiting the generality of the foregoing, the Company covenants and
agrees that it will comply with the provisions of the Tax Agreement and the
Project Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale
of the Bonds in order to refund the Prior Bonds and the Company agrees to
apply the gross proceeds of such loan to the refunding of the Prior Bonds.
(b) The Issuer and the Company expressly reserve the right to enter
into, to the extent permitted by law, an agreement or agreements other than
this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to refund all or any principal amount of the Bonds.
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<PAGE>
SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE. (a) On each
date provided in or pursuant to the Indenture for the payment (whether at
maturity or upon redemption or acceleration) of principal of, and premium,
if any, and interest on, the Bonds, until the principal of, and premium, if
any, and interest on, the Bonds shall have been fully paid or provision for
the payment thereof shall have been made in accordance with the Indenture,
the Company shall pay to the Trustee in immediately available funds, for
deposit in the Bond Fund, as a repayment installment of the loan of the
proceeds of the Bonds pursuant to Section 4.1(a) hereof, a sum equal to the
amount payable on such date (whether at maturity or upon redemption or
acceleration) as principal of, and premium, if any, and interest on, the
Bonds as provided in the Indenture; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or any Alternate Credit Facility; and
provided further, that the obligation of the Company to make any such
repayment installment shall be reduced by the amount of any moneys then on
deposit in the Bond Fund and available for such payment.
(b) The Company shall pay to the Trustee amounts equal to the amounts
to be paid by the Trustee for the purchase of Bonds pursuant to Article IV
of the Indenture. Such amounts shall be paid by the Company to the Trustee
in immediately available funds on the date such payments pursuant to Section
4.05 of the Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or under any Alternate Credit Facility or
to the extent moneys are available from the source described in clause (i)
of Section 4.05(a) of the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees of the
Trustee for the Ordinary Services rendered by it and an amount equal to the
Ordinary Expenses incurred by it under the Indenture and the Tax Agreement,
as and when the same become due, and (ii) the reasonable fees, charges and
expenses of the Trustee for reasonable Extraordinary Services and
Extraordinary Expenses, as and when the same become due, incurred under the
Indenture and the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable for, and
agrees that it will at all times indemnify and hold harmless the Trustee,
its officers, agents, servants and employees against, and pay all expenses
of the Trustee, its officers, agents, servants and employees, relating to
any lawsuit, proceeding or claim and resulting from any action or omission
taken or made by or on behalf of the Trustee, its officers, agents, servants
and employees pursuant to this Agreement, the Indenture or the Tax
Agreement, that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in
respect of which indemnity may be sought against the Company, the Trustee
shall promptly notify the Company in writing and the Company shall be
entitled to assume control of the defense thereof, including the employment
of Counsel and the payment of all expenses. The Trustee shall have the
right to employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such
action without its consent, but if any such action is settled with the
consent of the Company or if there be final judgment for the plaintiff in
any such action, the Company agrees to indemnify and hold
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harmless the Trustee from and against any loss or liability by reason of
such settlement or final judgment. The Company agrees that the
indemnification provided herein shall survive the termination of this
Agreement or the Indenture or the resignation of the Trustee.
(d) The Company agrees to pay all costs incurred in connection with
the issuance of the Bonds from sources other than Bond proceeds and the
Issuer shall have no obligation with respect to such costs.
(e) The Company agrees to indemnify and hold harmless the Issuer and
any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement, the Indenture or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds. The
Company agrees to pay the Issuer its Closing Fee in connection with the
issuance of the Bonds in the amount of $10,000. The Issuer may submit to
the Company periodic statements, not more frequently than monthly, for its
Administrative Expenses and the Company shall make payment to the Issuer of
the full amount of each such statement within 30 days after the Company
receives such statement.
(f) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent, and the Issuer shall
have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
(g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid and the Company will pay interest to the extent
permitted by law, on any overdue amount at the rate of interest borne by the
Bonds on the date on which such amount became due and payable until paid.
In the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same
with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to
its prime commercial borrowers until paid.
(h) To the extent that the Letter of Credit is in effect and moneys on
deposit in the Bond Fund constitute Available Moneys or have been deposited
in separate, segregated accounts in the Bond Fund for the purpose of
becoming Available Moneys, such moneys shall not be available for transfer
and shall not be transferred from the Bond Fund to the Rebate Fund to
satisfy the requirements of the Tax Agreement (unless the Company fails to
pay the amounts described below). In the event that moneys are not
available for transfer from the Bond Fund to the Rebate Fund as required by
the Tax Agreement, the Company agrees to pay any such amount required to be
so transferred and not available for such purpose in the Bond Fund by paying
such amount to the Trustee for deposit directly into the Rebate Fund. The
obligation of the Company set forth in this Section 4.2(h) shall survive the
termination of this Agreement.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and
unconditional without defense or set-
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off by reason of any default by the Issuer under this Agreement or under any
other agreement between the Company and the Issuer or for any other reason,
it being the intention of the parties that the payments required hereunder
will be paid in full when due without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is understood and
agreed that all payments required to be made by the Company pursuant to
Section 4.2 hereof (except payments made to the Trustee pursuant to Section
4.2(c) hereof, to the Remarketing Agent pursuant to Section 4.2(f) hereof,
to the Issuer pursuant to Section 4.2(e) hereof and to any or all the Issuer
and the Trustee and the Remarketing Agent pursuant to Section 4.2(g) hereof)
and certain rights of the Issuer hereunder are pledged and assigned by the
Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to
be paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent pursuant to Section 4.2(f) hereof and payments to be made
to the Issuer pursuant to Sections 4.2(e) and (g) hereof. The Project will
not constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND ALTERNATE CREDIT FACILITY. (a) The
Company shall arrange for a Letter of Credit or an Alternate Credit Facility
to be in effect at all times with such terms and conditions as required
under Sections 6.14 and 6.15 of the Indenture. Such Letter of Credit or
Alternate Credit Facility must be delivered to the Trustee by the Company
not later than 10:30 a.m., New York time, on the fifth Business Day
preceding the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms.
(b) At any time the Company may, at its option, provide for the
delivery to the Trustee of an Alternate Credit Facility. The Alternate
Credit Facility (a) may consist, at the option of the Company, of (i) first
mortgage bonds of the Company, (ii) a letter of credit, or (iii) such other
security or credit support as the Company may elect to furnish and which is
acceptable to the Issuer, in each case in an amount and having terms
sufficient to support the payment of the principal of and interest on all
Bonds then outstanding and, at the election of the Company, any of its other
obligations under this Agreement, (b) shall have administrative provisions
satisfactory to the Trustee, and (c) shall be for a stated term and shall
not be terminable prior to the end of such term except by action of the
Trustee at the direction of the Company upon the fulfillment of any
requirements of such Alternate Credit Facility and compliance with the
conditions set forth in Section 4.5(c) hereof. The Company shall have an
option, at any time, and from time to time, upon notice given as provided in
Section 4.5(c) hereof, to provide an Alternate Credit Facility in
substitution for the Letter of Credit or another Alternate Credit Facility,
but only in accordance with the provisions of this Section 4.5(b) and
Section 4.5(c) hereof.
(c) As a condition to the exercise by the Company of its option set
forth in Section 4.5(b) hereof to deliver an Alternate Credit Facility, the
Company shall provide to the Issuer, the Trustee and the Remarketing Agent,
at least 20 days prior to the fifth Business Day next preceding the
effective date of such change, a notice specifying (i) that the Letter of
Credit or the Alternate Credit Facility then in effect will be changed, (ii)
the effective date of such change (which must be at least five Business Days
prior to the date the then existing Letter of
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Credit or Alternate Credit Facility is to expire by its terms), (iii) the
form and substance of the Letter of Credit or the Alternate Credit Facility
then in effect, and (iv) the form and substance of the Alternate Credit
Facility to be in effect on the date specified in (ii) above. Such notice
to the Trustee must be accompanied by the opinion of Bond Counsel required
by Sections 6.14 and 6.15 of the Indenture and (i) a letter from Moody's, if
the Bonds should then be rated by Moody's, and from S&P, if the Bonds should
then be rated by S&P, to the effect that the substitution of the proposed
Alternate Credit Facility for the Letter of Credit or the Alternate Credit
Facility then in effect will not by itself result in a reduction, suspension
or withdrawal of its ratings of the Bonds which then prevail (except that
such rating evidence shall not be required if the Bonds are subject to a
mandatory tender for purchase pursuant to Section 4.02(a)(iii) of the
Indenture), and (ii) the form of the substitute Alternate Credit Facility to
be in place on the effective date of such change, together with any
documentation and opinions referred to by Moody's or S&P in any such letter.
(d) The Issuer and the Company agree that the Issuer will in the
Indenture authorize and direct the Trustee to accept and agree to conditions
and provisions of the Letter of Credit and any Alternate Credit Facility
which may be provided in accordance with the provisions of this Section 4.5.
SECTION 4.6. PAYMENT OF THE BONDS AND OTHER AMOUNTS. The Bonds and
interest and premium, if any, thereon shall be payable solely from (i)
payments made by the Company to the Trustee under Section 4.2(a) hereof,
(ii) amounts realized under the Letter of Credit or any Alternate Credit
Facility and (iii) other moneys on deposit in the Bond Fund and available
therefor.
Payments of principal of, and premium, if any, or interest on, the
Bonds with moneys in the Bond Fund constituting proceeds from the sale of
the Bonds or earnings on investments made under the provisions of the
Indenture shall be credited against the obligation to pay required by
Section 4.2(a) hereof, and the obligation to pay required by Section 4.2(a)
hereof shall be deemed to be satisfied and discharged to the extent of the
corresponding payment made to the Trustee under the Letter of Credit or any
Alternate Credit Facility.
Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same
upon the request of the Company and such redemption (unless conditional)
shall be made from payments made by the Company to the Trustee under Section
4.2(a) hereof and amounts realized under the Letter of Credit or any
Alternate Credit Facility equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon
redemption or acceleration or upon provision for payment in accordance with
Article VIII of the Indenture), payments shall be deemed paid to the extent
such payment or provision therefor has been made and is considered to be a
payment of principal of, or premium, if any, or interest on, such Bonds. If
such Bonds are thereby deemed paid in full, the Trustee shall notify the
Company and the Issuer that such payment requirement has been satisfied.
Subject to the foregoing, or unless the Company is entitled to a
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credit under this Agreement or the Indenture, all payments shall be in the
full amount required by Section 4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Company agrees that during the term
of this Agreement, it will maintain its corporate existence and its good
standing in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation unless (a) The acquirer of its assets or the corporation
with which it shall consolidate or into which it shall merge shall (i) be a
corporation organized under the laws of one of the states of the United
States of America, (ii) be qualified to do business in the State, (iii) be a
public utility, and (iv) assume in writing all of the obligations of the
Company under this Agreement and the Tax Agreement.
Any transfer of all or substantially all of the Company's assets to any
of its wholly owned subsidiaries shall not be deemed to constitute a
"disposition of all or substantially all of the Company's assets" within the
meaning of the preceding paragraph. Any such transfer of the Company's
assets shall not relieve the Company of any of its obligations under this
Agreement.
SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have an annual
audit made by its regular independent certified public accountants and to
furnish the Trustee (within 30 days after receipt by the Company) with a
balance sheet and statement of income and surplus showing the financial
condition of the Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Company and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
a report of said accountants that such statements have been prepared in
accordance with generally accepted accounting principles. The Company's
obligations under this Section 5.2 may be satisfied by delivering a copy of
the Company's Annual Report to the Trustee at the same time that it is
mailed to stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; ETC. The
Company shall maintain or cause to be maintained the Project in good repair
and keep it properly insured and shall promptly pay or cause to be paid all
costs thereof. The Company shall promptly pay or cause to be paid all
installments of taxes, installments of special assessments, and all
governmental, utility and other charges with respect to the Project, when
due. The Company may, at its own expense and in its own name in good faith
contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or
other charges, or installments thereof, to remain unpaid if such nonpayment
shall subject the Project or any part thereof to loss or forfeiture.
SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS. The Company shall
cause such security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to time to be
kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve, protect and perfect the security
of the Owners of the Bonds and the rights of the Trustee and, after payment
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in full of the Bonds as provided in the Indenture, the rights of the Bank
Group provided in the Indenture, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.04 of the Indenture to the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for
the purposes of the Company or needs of the Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT. The
Issuer and the Company agree that title to the Project shall be in and
remain in the Company, and that the Project shall be the sole property of
the Company in which the Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and
to the extent set forth in Section 2.03 of the Indenture. In the event the
Company elects to exercise any such option, the Company agrees that it shall
cause notices of adjustments of Rate Periods (or rescissions thereof) to be
given to the Issuer, the Trustee and the Remarketing Agent in accordance
with Section 2.03(a), (b), (c), (d) or (f) of the Indenture.
SECTION 5.8. INFORMATION REPORTING, ETC.. The Issuer covenants and
agrees that, upon the direction of the Company or Bond Counsel, it will mail
or cause to be mailed to the Secretary of the Treasury (or his designee as
prescribed by regulation, currently the Internal Revenue Service Center,
Philadelphia, PA 19255) a statement setting forth the information required
by Section 149(e) of the Code, which statement shall be in the form of the
Information Return for Tax-Exempt Private Activity Bond Issues (Form 8038)
of the Internal Revenue Service (or any successor form) and which shall be
completed by the Company and Bond Counsel based in part upon information
supplied by the Company and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise
incurred in connection with the issuance of the Bonds (including without
limitation any liability created by or arising out of the representations,
warranties or covenants set forth herein or otherwise) shall not impose a
debt or pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or a charge upon the general credit or taxing powers of
any of the foregoing, but shall be payable solely out of the Revenues or
other amounts payable by the Company to the Issuer hereunder or otherwise
(including without limitation any amounts derived from indemnifications
given by the Company).
Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the
State or any political subdivision thereof to levy any form of taxation
therefor or to make any appropriation for their payment. Nothing in the
Bonds or in the Indenture or this Agreement or the proceedings of the Issuer
authorizing the Bonds or in the Act or in any other related document shall
be construed to authorize the Issuer to create a debt of the Issuer or the
State or any political subdivision thereof within the meaning of any
constitutional or statutory provision of the State. The principal of, and
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premium, if any, and interest on, the Bonds shall be payable solely from the
funds pledged for their payment in accordance with the Indenture and
available therefor under this Agreement, the Letter of Credit and any
Alternate Credit Facility. Neither the State nor any political subdivision
thereof shall in any event be liable for the payment of the principal of,
premium, if any, or interest on, the Bonds or for the performance of any
pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or
agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political
subdivision thereof.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that the
Issuer and the Trustee and their duly authorized representatives shall have
the right at all reasonable times to enter upon and examine and inspect the
Project property and shall also be permitted, at all reasonable times, to
examine the books and records of the Company insofar as they relate to the
Project.
SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while the Letter of Credit is in effect, the
Company shall not and shall not allow any Insider of the Company to purchase
any Bonds except (a) with Available Moneys or (b) as provided in Section
4.2(b) hereof. At any time while the Letter of Credit is in effect, the
Issuer shall not and shall not allow any Insider of the Issuer to purchase
any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Agreement and the terms "event of default" or
"default" shall mean, whenever they are used in this Agreement, any one or
more of the following events:
(a) Failure by the Company to pay when due any amounts required
to be paid under Section 4.2(a) hereof, which failure results in an
event of default under subparagraph (a) or (b) of Section 9.01 of the
Indenture; or
(b) Failure by the Company to pay or cause to be paid any payment
required to be paid under Section 4.2(b) hereof, which failure results
in an event of default under subparagraph (c) of Section 9.01 of the
Indenture; or
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in
Section 4.5(a) of this Agreement, including without limitation failure
by the Company to provide the Trustee with a Letter of Credit or
Alternate Credit Facility on or before 10:30 a.m., New York time, on
the fifth Business Day preceding the date the then existing Letter of
Credit or Alternate Credit Facility is to expire; or
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(d) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) and (c) above, for a
period of 90 days after written notice, or in the case of failure by
the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed in Section 4.2(h)
hereof, for a period of 30 days after written notice, specifying such
failure and requesting that it be remedied and stating that such notice
is a "Notice of default" hereunder, given to the Company by the Trustee
or to the Company and the Trustee by the Issuer, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior
to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the Issuer and
the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted within the
applicable period and diligently pursued until the failure is corrected
and such corrective action or diligent pursuit is evidenced to the
Trustee by a certificate of an Authorized Company Representative; or
(e) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction seeking (i) liquidation, reorganization, dissolution,
winding-up or composition or adjustment of debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and
such proceeding or cause shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered against the
Company in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or
(f) The Company shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in
voluntary bankruptcy or shall make any general assignment for the
benefit of its creditors, or shall consent to the appointment of a
receiver or trustee of all or substantially all of its property, or
shall commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of competent
jurisdiction a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or shall fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under such Bankruptcy Code or
other applicable law; or
(g) Dissolution or liquidation of the Company; provided that the
term "dissolution or liquidation of the Company" shall not be construed
to include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.1 hereof; or
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(h) The occurrence of an "event of default" under the Indenture.
The foregoing provisions of Section 6.1(d) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole
or in part to carry out its agreements on its part herein contained, other
than the obligations on the part of the Company contained in Article IV and
Sections 5.3 and 6.4 hereof, the Company shall not be deemed in default
during the continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within
the discretion of the Company and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is
in the sole judgment of the Company unfavorable to the Company.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company, declare the
unpaid indebtedness under Section 4.2(a) hereof to be due and payable
immediately, if concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and
payable, and upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in the Bond
Fund, to pay the unpaid principal of, premium, if any, and interest
accrued on, the Bonds) shall become and shall be immediately due and
payable as liquidated damages; and
(b) may take whatever action at law or in equity as may appear
necessary or desirable to collect the payments and other amounts then
due and thereafter to become due hereunder or to enforce performance
and observance of any obligation, agreement or covenant of the Company
under this Agreement.
Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance with the provisions of the Indenture.
No action taken pursuant to this Section 6.2 shall relieve the Company from
the Company's obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the
Company as such, either directly or through the Company, under any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and
6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other
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remedy given under this Agreement or now or hereafter existing at law or in
equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In
order to entitle the Issuer or the Trustee to exercise any remedy reserved
to it in this Article, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required. Subject to the
provisions of the Indenture and hereof, such rights and remedies as are
given the Issuer hereunder shall also extend to the Trustee. The Owners of
the Bonds, subject to the provisions of the Indenture, shall be entitled to
the benefit of all covenants and agreements herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ Counsel or incur other
expenses for the collection of the indebtedness hereunder or the enforcement
of performance or observance of any obligation or agreement on the part of
the Company herein contained, the Company agrees that it will on demand
therefor pay to the Trustee, the Issuer or, if so directed by the Issuer, to
the Counsel for the Issuer, the reasonable fees of such Counsel and such
other expenses so incurred by or on behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. No waiver shall be effective
unless in writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company without
both the consent of the Trustee and the Bank to such waiver. The Trustee
and the Bank shall have the power to waive any default by the Company
hereunder, except a default under Section 3.4, 4.2(e), 4.2(g), 5.3 or 6.4
hereof, in so far as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee
pursuant to Section 9.02 of the Indenture, (i) all arrears of principal of
and interest on the outstanding Bonds and interest on overdue principal and
(to the extent permitted by law) on overdue installments of interest at the
rate of interest borne by the Bonds on the date on which such principal or
interest became due and payable and the premium, if any, on all Bonds then
Outstanding which have become due and payable otherwise than by
acceleration, and all other sums payable under the Indenture, except the
principal of and the interest on such Bonds which by such acceleration shall
have become due and payable, shall have been paid, (ii) all other things
shall have been performed in respect of which there was a default, (iii)
there shall have been paid the reasonable fees and expenses of the Trustee
and of the Owners of such Bonds, including reasonable attorneys' fees paid
or incurred and (iv) such event of default under the Indenture shall be
waived in accordance with Section 9.09 of the Indenture with the consequence
that such acceleration under Section 9.02 of the Indenture is rescinded,
then the Company's default hereunder shall be deemed to have been waived and
its consequences rescinded and no further action or consent by the Trustee
or the Issuer or the Bank shall be required; provided that there has been
furnished an opinion of Bond Counsel to the effect that such waiver will not
adversely affect the exemption from federal income taxes of interest on the
Bonds.
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<PAGE>
ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part
at any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to
provide for the defeasance of the Bonds pursuant to Article VIII of the
Indenture. In the event the Company elects to provide for the redemption of
Bonds as permitted by this Section, the Company shall notify and instruct
the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in advance of maturity. If the Company so elects, any
redemption of Bonds pursuant to Section 3.01(A) of the Indenture may be made
conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for
redemption in accordance with the Indenture or become subject to mandatory
redemption, it will prepay the indebtedness hereunder in whole or in part,
prior to the date on which notice of such redemption is given to the owners
of such Bonds, in an amount sufficient to redeem such Bonds on the date
fixed for the redemption of the Bonds.
SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of
the Bonds in accordance with Section 3.01(B) of the Indenture, the Company
shall give written notice to the Issuer, the Bank, the Remarketing Agent and
the Trustee. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the retirement of the Bonds
in whole or in part pursuant to call for redemption and shall be given by
the Company not less than 35 days prior to the date of the redemption which
is to occur as a result of such prepayment (or such later date as is
acceptable to the Trustee and the Issuer), and in the case of a redemption
of Bonds pursuant to Section 3.01(B) of the Indenture shall be given on a
date which will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for redemption of
the Bonds or portions thereof, there shall be deposited with the Trustee
from drawings upon the Letter of Credit or payments by the Company or from
amounts realized under any Alternate Credit Facility as required by Section
7.1 or 7.2, as appropriate, for payment into the Bond Fund. Any other
provision of this Agreement or the Indenture to the contrary
notwithstanding, any prepayment of moneys hereunder shall be made in such
manner and at such time that any redemption of Bonds or portions thereof
will be made with Available Moneys.
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<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be
sufficiently given if in writing and shall be deemed given when mailed by
first class mail, postage prepaid, or by qualified overnight courier
service, courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: if to the Issuer, at 500 South
Grand Central Parkway, 6th Floor (89106), P.O. Box 551601, Las Vegas, Nevada
89155-1601, or to telecopy number (702) 455-3558, Attention: County Manager;
if to the Company, at P.O. Box 230, 6226 West Sahara Avenue, Las Vegas,
Nevada 89151, or to telecopy number (702) 367-5629, Attention: Treasurer; if
to the Trustee, at 114 West 47th Street, New York, New York 10036-1532 or to
telecopy number (212) 852-1625 Attention: Corporate Trust Administration;
if to the Remarketing Agent, at 85 Broad Street, 24th Floor, New York, New
York 10004, Attention: Municipal Money Markets Desk, or to telecopy number
(212) 346-4209; and if to the Bank or the Bank Agent, at 2029 Century Park
East, Suite 2900, Los Angeles, California 90067, Attention: Minerva Arvisu,
or to telecopy number (310) 203-0539. In case by reason of the suspension
of regular mail service, it shall be impracticable to give notice by first
class mail of any event to the Issuer, to the Company, to the Remarketing
Agent, to the Bank or to the Bank Agent when such notice is required to be
given pursuant to any provisions of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed
to be sufficient giving of such notice. The Issuer, the Company, the
Trustee, the Remarketing Agent, the Bank and the Bank Agent may, by notice
pursuant to this Section 8.1, designate any different addresses to which
subsequent notices, certificates or other communications shall be sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by
either party without consent of the other and the Bank or the Bank Agent,
except that the Issuer shall assign to the Trustee its rights under this
Agreement (except under Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as
provided by Section 4.4 hereof, and the Company may assign its rights under
this Agreement to any transferee or any surviving or resulting corporation
as provided by Section 5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties hereto that after payment in full of (i) the Bonds (or provision
for payment thereof having been made in accordance with the provisions of
the Indenture), (ii) the fees, charges and expenses of the Trustee in
accordance with the Indenture, (iii) the Administrative Expenses, (iv) the
fees and expenses of the Remarketing Agent and the Issuer and (v) all other
amounts required to be
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<PAGE>
paid under this Agreement and the Indenture, any amounts remaining in the
Bond Fund shall belong to and be paid to the Company by the Trustee;
provided, however, that if there remain reimbursement or other obligations
of the Company under the Reimbursement Agreement, such moneys remaining in
the Bond Fund shall, subject to Section 13.10(b) of the Indenture, be paid
by the Trustee to the Bank Agent upon written direction of the Bank Agent to
such extent.
SECTION 8.6. AMENDMENTS, CHANGES, AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee and the Bank thereto is obtained. Subject to the
written consent of the Trustee and the Bank, the Issuer and the Company
agree to enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this Agreement or the
Indenture, (ii) for the purpose of curing any ambiguity, formal defect or
omission in this Agreement, (iii) so as to add additional rights acquired
in accordance with the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or any of
them, or (v) in connection with any other change herein which is not to the
prejudice of the Trustee, the Bank or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely
and only out of funds provided or to be provided by the Company) or
surrender or abdicate in whole or in part any of its essential governmental
functions or powers or any of its discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Company is required to take some action at the request of the other, such
approval of such request shall be given for the Issuer by the Authorized
Issuer Representative and for the Company by the Authorized Company
Representative, and the other party hereto and the Trustee shall be
authorized to act on any such approval or request and neither party hereto
shall have any complaint against the other or against the Trustee as a
result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from its date to and including such date as all of the
Bonds issued under the Indenture shall have been fully paid or retired (or
provision for such payment shall have been made as provided in the
Indenture), provided that all representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds and
the covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f),
4.2(g) and 4.2(h) hereof shall survive the termination of this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of
all other fees and charges having been made in accordance with the
provisions of this Agreement and the Indenture, the Issuer shall deliver to
the Company any documents and take or cause the Trustee to take such actions
as may be necessary to effectuate the cancellation and evidence the
termination of this Agreement.
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<PAGE>
SECTION 8.11. REFERENCES TO BANK AND PROVIDER. At any time that the
Letter of Credit (and if at such time there shall be no Pledged Bonds) or
any Alternate Credit Facility is not in effect and the Bank Group shall have
been paid all amounts owed them under the Reimbursement Agreement (as
evidenced by a written certificate of the Bank Agent delivered to the
Trustee to such effect), all references herein to the Bank or the Bank Agent
or the Bank Group or the Provider, as the case may be, shall be deemed
ineffective. Any provisions hereof requiring the consent of the Bank or the
Bank Agent or the Bank Group or the Provider shall be deemed ineffective if
the Bank or the Provider is at any such time in default in its obligations
under the Letter of Credit or the Alternate Credit Facility, as the case may
be, to fund a drawing thereunder made in strict compliance with the terms of
such Letter of Credit or Alternate Credit Facility.
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By YVONNE ATKINSON GATES
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
LORETTA BOWMAN
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
- --------------------------------
Secretary
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By STEVEN W. RIGAZIO
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
RICHARD L. HINCKLEY
- --------------------------------
Secretary
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<PAGE>
Series C
--------
============================================================================
FINANCING AGREEMENT
Dated as of October 1, 1995
By and Between
CLARK COUNTY, NEVADA
and
NEVADA POWER COMPANY
RELATING TO
INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1995C
============================================================================
The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g),
5.3 and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and
certain other rights of the Issuer under this Financing Agreement have been
pledged and assigned under the Indenture of Trust dated as of October 1,
1995, between the Issuer and United States Trust Company of New York, as
Trustee.
<PAGE>
FINANCING AGREEMENT
-------------------
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference).
SECTION HEADING PAGE
ARTICLE I DEFINITIONS ............................................ 1
ARTICLE II REPRESENTATIONS ........................................ 6
Section 2.1. Representations and Covenants by the Issuer .......... 6
Section 2.2. Representations by the Company ....................... 6
ARTICLE III ISSUANCE OF THE BONDS .................................. 7
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds ............................................. 7
Section 3.2. Deposit of Additional Funds by Company; Redemption
of Series 1985 Bonds ................................. 7
Section 3.3. Investment of Moneys in the Bond Fund and the
Prior Bonds Redemption Fund .......................... 8
Section 3.4. Tax Exempt Status of Bonds ........................... 9
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT ...................... 9
Section 4.1. Loan of Bond Proceeds ................................ 9
Section 4.2. Loan Repayments and Other Amounts Payable ............ 9
Section 4.3. No Defense or Set-Off ................................ 11
Section 4.4. Payments Pledged and Assigned ........................ 12
Section 4.5. Letter of Credit and Alternate Credit Facility ....... 12
Section 4.6. Payment of the Bonds and Other Amounts ............... 13
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS ....................... 14
Section 5.1. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted .......... 14
Section 5.2. Annual Statement ..................................... 14
Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc. ....... 14
Section 5.4. Recordation and Other Instruments .................... 15
Section 5.5. No Warranty by the Issuer ............................ 15
Section 5.6. Agreement as to Ownership and Use of the Project ..... 15
Section 5.7. Company to Furnish Notice of Adjustments of
Interest Rate Periods ................................ 15
Section 5.8. Information Reporting, Etc. .......................... 15
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<PAGE>
Section 5.9. Limited Liability of Issuer .......................... 15
Section 5.10. Inspection of Project ................................ 16
Section 5.11. Purchases of Bonds by Company or Issuer Prohibited;
Exceptions ........................................... 16
Article VI EVENTS OF DEFAULT AND REMEDIES ......................... 16
Section 6.1. Events of Default Defined ............................ 16
Section 6.2. Remedies on Default .................................. 18
Section 6.3. No Remedy Exclusive .................................. 19
Section 6.4. Agreement to Pay Fees and Expenses of Counsel ........ 19
Section 6.5. No Additional Waiver Implied by One Waiver;
Consents to Waivers .................................. 19
Article VII OPTIONS AND OBLIGATIONS OF COMPANY; PREPAYMENTS;
REDEMPTION OF BONDS .................................... 20
Section 7.1. Option to Prepay ..................................... 20
Section 7.2. Obligation to Prepay ................................. 20
Section 7.3. Notice of Prepayment ................................. 20
Article VIII MISCELLANEOUS .......................................... 21
Section 8.1. Notices .............................................. 21
Section 8.2. Assignments .......................................... 21
Section 8.3. Severability ......................................... 22
Section 8.4. Execution of Counterparts ............................ 22
Section 8.5. Amounts Remaining in Bond Fund ....................... 22
Section 8.6. Amendments, Changes and Modifications ................ 22
Section 8.7. Governing Law ....................................... 22
Section 8.8. Authorized Issuer and Company Representatives ........ 22
Section 8.9. Term of the Agreement ................................ 23
Section 8.10. Cancellation at Expiration of Term ................... 23
Section 8.11. References to Bank and Provider ...................... 23
Signature ............................................................... 24
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<PAGE>
THIS FINANCING AGREEMENT made and entered into as of October 1, 1995,
by and between CLARK COUNTY, NEVADA, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"),
and NEVADA POWER COMPANY, a corporation duly organized and existing under
the laws of the State of Nevada, party of the second part (hereinafter
referred to as the "Company"),
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall not constitute or give rise to a
pecuniary liability or a charge upon its general credit or against its
taxing powers but shall be payable solely out of the Revenues (as
hereinafter defined) derived from this Financing Agreement and the Bonds, as
hereinafter defined):
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise. The singular shall include
the plural and the masculine shall include the feminine.
"Act" means the County Economic Development Revenue Bond Law, as
amended, contained in Sections 244A.669 to 244A.763, inclusive, of the
Nevada Revised Statutes.
"Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.
"Agreement" means this Financing Agreement by and between the Issuer
and the Company, as from time to time amended and supplemented.
"Alternate Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Alternate Credit Facility
delivered to the Trustee in connection therewith, provided in accordance
with Section 4.5 of this Agreement.
"Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such
<PAGE>
person and signed on behalf of the Company by any officer of the Company.
Such certificate may designate an alternate or alternates.
"Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished
to the Company and the Trustee containing the specimen signature of such
person and signed on behalf of the Issuer by its Chair. Such certificate
may designate an alternate or alternates.
"Bank" means Barclays Bank PLC, acting through its New York Branch,
in its capacity as issuer of the Letter of Credit, its successors in such
capacity, and its assigns. If an Alternate Credit Facility in the form of a
letter of credit has been issued and delivered in accordance with Section
4.5 of this Agreement, "Bank" shall mean the Provider of such Alternate
Credit Facility, if in the form of a letter of credit, in its capacity as
issuer of such Alternate Credit Facility, its successors in such capacity,
and its assigns.
"Bank Agent" means Barclays Bank PLC, acting through its New York
Branch, in its capacity as agent for the Bank Group, and its successors in
such capacity; provided, however, if there is no party acting as agent under
the Reimbursement Agreement, "Bank Agent" shall mean the Bank.
"Bank Group" means the banks party to the Reimbursement Agreement,
including the Bank.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978, as amended from time to time, or any substitute or replacement
legislation.
"Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02 of
the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized
municipal bond counsel mutually acceptable to the Issuer, the Trustee, the
Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the Indenture.
"Business Day" means a day on which banks located in the city in which
the Principal Office of the Trustee is located and in the city or cities in
which any office at which any action must be instituted or taken in order to
realize upon the Letter of Credit or an Alternate Credit Facility then in
effect is or are located, are not required or authorized to remain closed
and on which the New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations promulgated or proposed thereunder.
-2-
<PAGE>
"Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee
corporation as permitted in Section 5.1 hereof.
"Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all expenses (including fees and expenses of Counsel)
incurred under the Indenture and the Tax Agreement other than Ordinary
Services and Ordinary Expenses.
"First Mortgage Indenture" means that certain Indenture of Mortgage and
Deed of Trust, dated as of October 1, 1953, from Southern Nevada Power Co.
(now Nevada Power Company) to Bankers Trust Company (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), as trustee, as supplemented, modified or amended from time to
time or at any time by supplemental indentures.
"Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of
their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; lightning; earthquakes; fires;
tornadoes; volcanoes; storms; droughts; floods; explosions, breakage, or
malfunction or accident to machinery, transmission lines, pipes or canals,
even if resulting from negligence; civil disturbances; or any other cause
not reasonably within the control of the Company.
"Governing Body" means the Board of County Commissioners of the Issuer.
"Hereof," "herein," "hereunder" and other words of similar import refer
to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and United States Trust Company of New York, as Trustee,
of even date herewith, pursuant to which the Bonds are authorized to be
issued, including any indentures supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy Code.
"Issuer" means Clark County, Nevada, and any successor body to the
duties or functions of the Issuer.
"Letter of Credit" means the irrevocable direct-pay Letter of Credit
issued by the Bank to the Trustee, including any extensions thereof,
contemporaneously with the issuance of the Bonds, provided that upon the
issuance and delivery of an Alternate Credit Facility in the form of a
letter of credit in accordance with Section 4.5 of this Agreement, "Letter
of
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<PAGE>
Credit" shall mean such Alternate Credit Facility, if in the form of a
letter of credit, instead of the letter of credit for which such Alternate
Credit Facility has been substituted.
"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Company and acceptable
to the Bank Agent, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered and those expenses including fees and expenses of Counsel,
normally incurred by a trustee or paying agent under instruments similar to
the Indenture and the Tax Agreement.
"Original Purchaser" means Goldman, Sachs & Co., Lehman Brothers, Inc.,
M. R. Beal & Company and Artemis Capital Group, Inc.
"Owner" or "owner of Bonds" means the Person or Persons in whose name
or names a Bond shall be registered on books of the Issuer kept by the
Registrar for that purpose in accordance with the terms of the Indenture.
"Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.
"Project" means the "Project" as defined in the Series 1985 Agreement.
"Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with
respect to certain facts which are within the knowledge of the Company and
certain reasonable assumptions of the Company, to enable Chapman and Cutler,
as Bond Counsel, to determine that interest on the Bonds is not includable
in the gross income of the Owners of the Bonds for federal income taxes
purposes.
"Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement and Section 6.16 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995, among the Company, the Bank Agent,
the Bank and the Bank Group, pursuant to which the initial Letter of Credit
is issued, and any subsequent reimbursement agreement between the Company
and a Bank pursuant to which a subsequent Letter of Credit is issued by the
Bank and delivered to the Trustee, and in each case any and all
modifications, amendments and supplements thereto.
"Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.11 of the Indenture and any permitted successor thereto.
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<PAGE>
"Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of
the following: (i) all amounts payable from time to time by the Company
under Section 4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
including all moneys drawn by the Trustee under the Letter of Credit to pay
the principal of and premium, if any, and interest on the Bonds and all
amounts realized by the Trustee from any Alternate Credit Facility to pay
the principal of and premium, if any, and interest on the Bonds, all of
which amounts are to be deposited in the Bond Fund, and (ii) any portion
of the net proceeds of the Bonds deposited with the Trustee in the Bond Fund
under Section 6.03 of the Indenture.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of
New York, its successors and their assigns, and if such division or
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Company and acceptable to the Bank Agent, with notice to the Trustee.
"Series 1985 Agreement" means the Financing Agreement, dated as of
December 1, 1985, between the Issuer and the Company relating to the Series
1985 Bonds.
"Series 1985 Bonds" means the Issuer's Floating Rate Weekly Demand
Industrial Development Revenue Bonds (Nevada Power Company Project)
Series 1985, currently outstanding in the aggregate principal amount of
$44,000,000.
"Series 1985 Bond Fund" means the fund established pursuant to Section
4.01 of the Series 1985 Indenture.
"Series 1985 Indenture" means the Indenture of Trust, dated as of
December 1, 1985, between the Issuer and the Series 1985 Trustee, pursuant
to which the Series 1985 Bonds were issued.
"Series 1985 Trustee" means United States Trust Company of New York, as
trustee under the Series 1985 Indenture.
"State" means the State of Nevada.
"Tax Agreement" means the Tax Exemption Certificate and Agreement with
respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.
"Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.
"Trustee" means United States Trust Company of New York, as Trustee
under the Indenture, and any successor Trustee appointed pursuant to Section
10.06 or 10.09 of the
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Indenture at the time serving as Trustee thereunder, and any separate or
co-trustee serving as such thereunder.
All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE ISSUER. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing political
subdivision of the State of Nevada. Under the provisions of the Act,
the Issuer is authorized to enter into the transactions contemplated by
this Agreement, the Indenture and the Tax Agreement and to carry out
its obligations hereunder and thereunder. The Issuer has duly
authorized the execution and delivery of this Agreement, the Indenture
and the Tax Agreement.
(b) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's interests in this
Agreement and the Revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned as security for payment of the
principal of, premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that the issuance
of the Bonds will further the public purposes of the Act.
(d) The Issuer has not assigned and will not assign any of its
interests in this Agreement other than pursuant to the Indenture.
(e) No member of the Governing Body of the Issuer, nor any other
officer of the Issuer, has any interest, financial, employment or
other, in the Company or in the transactions contemplated hereby.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Company is a corporation duly incorporated under the laws
of the State and is in good standing in the State, is qualified to do
business as a foreign corporation in all other states and jurisdictions
wherein the nature of the business transacted by the Company or the
nature of the property owned or leased by it makes such licensing or
qualification necessary, has power to enter into and by proper
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corporate action has been duly authorized to execute and deliver this
Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the
Tax Agreement, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any corporate restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes a
default under any of the foregoing, or results in the creation or
imposition of any lien, charge or encumbrance whatsoever upon any of
the property or assets of the Company under the terms of any instrument
or agreement other than the Indenture.
(c) The statements, information and descriptions contained in the
Project Certificate and the Tax Agreement, as of the date hereof and at
the time of the delivery of the Bonds to the Original Purchaser, are
and will be true, correct and complete, do not and will not contain any
untrue statement or misleading statement of a material fact, and do not
and will not omit to state a material fact required to be stated
therein or necessary to make the statements, information and
descriptions contained therein, in the light of the circumstances under
which they were made, not misleading.
ARTICLE III
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
In order to provide funds to lend to the Company to refund the Series 1985
Bonds as provided in Section 4.1 hereof, the Issuer agrees that it will
issue under the Indenture, sell and cause to be delivered to the Original
Purchaser thereof, its Bonds in the aggregate principal amount of
$44,000,000, bearing interest and maturing as set forth in the Indenture.
The Issuer will thereupon deposit the proceeds received from the sale of the
Bonds as follows: (1) in the Bond Fund, a sum equal to any accrued interest
paid by the Original Purchaser of the Bonds; and (2) $44,000,000 of the
proceeds from the sale of the Bonds in the Prior Bonds Redemption Fund to be
remitted by the Trustee to the Series 1985 Trustee for deposit in the Series
1985 Bond Fund to be used to pay to the owners thereof the principal of the
Series 1985 Bonds upon redemption thereof.
SECTION 3.2. DEPOSIT OF ADDITIONAL FUNDS BY COMPANY; REDEMPTION OF
SERIES 1985 BONDS. The Company covenants that such additional amounts as
may be required to redeem the Series 1985 Bonds will be deposited with the
Series 1985 Trustee pursuant to the Series 1985 Indenture for such purpose.
Income derived from the investment of the proceeds of the Bonds deposited in
the Prior Bonds Redemption Fund will be used to satisfy to that extent the
obligations of the Company specified in this Section 3.2 in connection
with the Series 1985 Bonds. The Company covenants that it will cause the
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Series 1985 Bonds to be redeemed within 90 days after the issuance and
delivery of the Bonds.
SECTION 3.3. INVESTMENT OF MONEYS IN THE BOND FUND AND THE PRIOR BONDS
REDEMPTION FUND. Except as otherwise herein provided, any moneys held as a
part of the Bond Fund and the Prior Bonds Redemption Fund shall be invested
or reinvested by the Trustee at the written direction, or the oral direction
promptly confirmed in writing, of an Authorized Company Representative as to
specific investments, to the extent permitted by law, in:
(a) bonds or other obligations of the United States of America;
(b) bonds or other obligations, the payment of the principal of
and interest on which is unconditionally guaranteed by the United
States of America;
(c) obligations issued or guaranteed as to principal and interest
by any agency or person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(d) obligations issued or guaranteed by any state of the United
States of America, or any political subdivision of any such state, or
in funds consisting of such obligations to the extent described in
Treasury Regulation 1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by commercial
banks;
(h) repurchase agreements fully secured by obligations issued or
guaranteed as to principal and interest by the United States of America
or by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(i) certificates of deposit issued by commercial banks, including
banks domiciled outside of the United States of America; and
(j) units of taxable government money market portfolios composed
of obligations guaranteed as to principal and interest by the United
States of America or repurchase agreements fully collateralized by such
obligations.
The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the
interest accruing thereon and any profit realized therefrom shall be
credited to such fund, subject to the provisions of the Tax
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Agreement. The Company agrees that to the extent any moneys in the Bond
Fund represent moneys realized under the Letter of Credit or any Alternate
Credit Facility or moneys held for the payment of Bonds pursuant to Sections
6.07 and 6.13 of the Indenture or moneys held for the payment of the
purchase price of Bonds pursuant to Article IV of the Indenture, such moneys
shall not be invested. In addition, the Company agrees that to the
extent that any moneys in the Bond Fund represent moneys to be used to pay
the premium portion of the redemption price of Bonds pursuant to Section
3.01(A)(3) of the Indenture such moneys shall be invested only in
Governmental Obligations maturing on or before the applicable redemption
date or dates.
SECTION 3.4. TAX EXEMPT STATUS OF BONDS. The Company covenants
and agrees that it has not taken or permitted and will not take or permit
any action which results in interest paid on the Bonds being included in
gross income of the holders or beneficial owners of the Bonds for purposes
of federal income taxation (other than a holder or beneficial owner who is a
"substantial user" of the Project or a "related person" within the meaning
of Section 147(a) of the Code). The Company covenants that none of the
proceeds of the Bonds or the payments to be made under this Agreement, or
any other funds which may be deemed to be proceeds of the Bonds pursuant to
Section 148(a) of the Code, will be invested or used in such a way, and that
no actions will be taken or not taken, as to cause the Bonds to be treated
as "arbitrage bonds" within the meaning of Section 148(a) of the Code.
Without limiting the generality of the foregoing, the Company covenants and
agrees that it will comply with the provisions of the Tax Agreement and the
Project Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale
of the Bonds in order to refund the Series 1985 Bonds and the Company agrees
to apply the gross proceeds of such loan to the refunding of the Series 1985
Bonds.
(b) The Issuer and the Company expressly reserve the right to enter
into, to the extent permitted by law, an agreement or agreements other than
this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to refund all or any principal amount of the Bonds.
SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE. (a) On each
date provided in or pursuant to the Indenture for the payment (whether at
maturity or upon redemption or acceleration) of principal of, and premium,
if any, and interest on, the Bonds, until the principal of, and premium, if
any, and interest on, the Bonds shall have been fully paid or provision for
the payment thereof shall have been made in accordance with the Indenture,
the Company shall pay to the Trustee in immediately available funds, for
deposit
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in the Bond Fund, as a repayment installment of the loan of the proceeds of
the Bonds pursuant to Section 4.1(a) hereof, a sum equal to the amount
payable on such date (whether at maturity or upon redemption or
acceleration) as principal of, and premium, if any, and interest on, the
Bonds as provided in the Indenture; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or any Alternate Credit Facility; and
provided further, that the obligation of the Company to make any such
repayment installment shall be reduced by the amount of any moneys then on
deposit in the Bond Fund and available for such payment.
(b) The Company shall pay to the Trustee amounts equal to the amounts
to be paid by the Trustee for the purchase of Bonds pursuant to Article IV
of the Indenture. Such amounts shall be paid by the Company to the Trustee
in immediately available funds on the date such payments pursuant to Section
4.05 of the Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or under any Alternate Credit Facility or
to the extent moneys are available from the source described in clause (i)
of Section 4.05(a) of the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees of the
Trustee for the Ordinary Services rendered by it and an amount equal to the
Ordinary Expenses incurred by it under the Indenture and the Tax Agreement,
as and when the same become due, and (ii) the reasonable fees, charges and
expenses of the Trustee for reasonable Extraordinary Services and
Extraordinary Expenses, as and when the same become due, incurred under the
Indenture and the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable for, and
agrees that it will at all times indemnify and hold harmless the Trustee,
its officers, agents, servants and employees against, and pay all expenses
of the Trustee, its officers, agents, servants and employees, relating to
any lawsuit, proceeding or claim and resulting from any action or omission
taken or made by or on behalf of the Trustee, its officers, agents, servants
and employees pursuant to this Agreement, the Indenture or the Tax
Agreement, that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in
respect of which indemnity may be sought against the Company, the Trustee
shall promptly notify the Company in writing and the Company shall be
entitled to assume control of the defense thereof, including the employment
of Counsel and the payment of all expenses. The Trustee shall have the
right to employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such
action without its consent, but if any such action is settled with the
consent of the Company or if there be final judgment for the plaintiff in
any such action, the Company agrees to indemnify and hold harmless the
Trustee from and against any loss or liability by reason of such settlement
or final judgment. The Company agrees that the indemnification provided
herein shall survive the termination of this Agreement or the Indenture or
the resignation of the Trustee.
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(d) The Company agrees to pay all costs incurred in connection with
the issuance of the Bonds from sources other than Bond proceeds and the
Issuer shall have no obligation with respect to such costs.
(e) The Company agrees to indemnify and hold harmless the Issuer and
any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement, the Indenture or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds. The
Company agrees to pay the Issuer its Closing Fee in connection with the
issuance of the Bonds in the amount of $10,000. The Issuer may submit to
the Company periodic statements, not more frequently than monthly, for its
Administrative Expenses and the Company shall make payment to the Issuer of
the full amount of each such statement within 30 days after the Company
receives such statement.
(f) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent, and the Issuer shall
have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
(g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid and the Company will pay interest to the extent
permitted by law, on any overdue amount at the rate of interest borne by the
Bonds on the date on which such amount became due and payable until paid.
In the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same
with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to
its prime commercial borrowers until paid.
(h) To the extent that the Letter of Credit is in effect and moneys on
deposit in the Bond Fund constitute Available Moneys or have been deposited
in separate, segregated accounts in the Bond Fund for the purpose of
becoming Available Moneys, such moneys shall not be available for transfer
and shall not be transferred from the Bond Fund to the Rebate Fund to
satisfy the requirements of the Tax Agreement (unless the Company fails to
pay the amounts described below). In the event that moneys are not
available for transfer from the Bond Fund to the Rebate Fund as required by
the Tax Agreement, the Company agrees to pay any such amount required to be
so transferred and not available for such purpose in the Bond Fund by paying
such amount to the Trustee for deposit directly into the Rebate Fund. The
obligation of the Company set forth in this Section 4.2(h) shall survive the
termination of this Agreement.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and
unconditional without defense or set-off by reason of any default by the
Issuer under this Agreement or under any other agreement between the Company
and the Issuer or for any other reason, it being the
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intention of the parties that the payments required hereunder will be paid
in full when due without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is understood and
agreed that all payments required to be made by the Company pursuant to
Section 4.2 hereof (except payments made to the Trustee pursuant to Section
4.2(c) hereof, to the Remarketing Agent pursuant to Section 4.2(f) hereof,
to the Issuer pursuant to Section 4.2(e) hereof and to any or all the Issuer
and the Trustee and the Remarketing Agent pursuant to Section 4.2(g) hereof)
and certain rights of the Issuer hereunder are pledged and assigned by the
Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to
be paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent pursuant to Section 4.2(f) hereof and payments to be made
to the Issuer pursuant to Sections 4.2(e) and (g) hereof. The Project will
not constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND ALTERNATE CREDIT FACILITY. (a) The
Company shall arrange for a Letter of Credit or an Alternate Credit Facility
to be in effect at all times with such terms and conditions as required
under Sections 6.14 and 6.15 of the Indenture. Such Letter of Credit or
Alternate Credit Facility must be delivered to the Trustee by the Company
not later than 10:30 a.m., New York time, on the fifth Business Day
preceding the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms.
(b) At any time the Company may, at its option, provide for the
delivery to the Trustee of an Alternate Credit Facility. The Alternate
Credit Facility (a) may consist, at the option of the Company, of (i) first
mortgage bonds of the Company, (ii) a letter of credit, or (iii) such other
security or credit support as the Company may elect to furnish and which is
acceptable to the Issuer, in each case in an amount and having terms
sufficient to support the payment of the principal of and interest on all
Bonds then outstanding and, at the election of the Company, any of its other
obligations under this Agreement, (b) shall have administrative provisions
satisfactory to the Trustee, and (c) shall be for a stated term and shall
not be terminable prior to the end of such term except by action of the
Trustee at the direction of the Company upon the fulfillment of any
requirements of such Alternate Credit Facility and compliance with the
conditions set forth in Section 4.5(c) hereof. The Company shall have an
option, at any time, and from time to time, upon notice given as provided in
Section 4.5(c) hereof, to provide an Alternate Credit Facility in
substitution for the Letter of Credit or another Alternate Credit Facility,
but only in accordance with the provisions of this Section 4.5(b) and
Section 4.5(c) hereof.
(c) As a condition to the exercise by the Company of its option set
forth in Section 4.5(b) hereof to deliver an Alternate Credit Facility, the
Company shall provide to the Issuer, the Trustee and the Remarketing Agent,
at least 20 days prior to the fifth Business Day next preceding the
effective date of such change, a notice specifying (i) that the Letter of
Credit or the Alternate Credit Facility then in effect will be changed, (ii)
the effective date of such change (which must be at least five Business Days
prior to the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms), (iii) the
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form and substance of the Letter of Credit or the Alternate Credit Facility
then in effect, and (iv) the form and substance of the Alternate Credit
Facility to be in effect on the date specified in (ii) above. Such notice
to the Trustee must be accompanied by the opinion of Bond Counsel required
by Sections 6.14 and 6.15 of the Indenture and (i) a letter from Moody's, if
the Bonds should then be rated by Moody's, and from S&P, if the Bonds should
then be rated by S&P, to the effect that the substitution of the proposed
Alternate Credit Facility for the Letter of Credit or the Alternate Credit
Facility then in effect will not by itself result in a reduction, suspension
or withdrawal of its ratings of the Bonds which then prevail (except that
such rating evidence shall not be required if the Bonds are subject to a
mandatory tender for purchase pursuant to Section 4.02(a)(iii) of the
Indenture), and (ii) the form of the substitute Alternate Credit Facility to
be in place on the effective date of such change, together with any
documentation and opinions referred to by Moody's or S&P in any such letter.
(d) The Issuer and the Company agree that the Issuer will in the
Indenture authorize and direct the Trustee to accept and agree to conditions
and provisions of the Letter of Credit and any Alternate Credit Facility
which may be provided in accordance with the provisions of this Section 4.5.
SECTION 4.6. PAYMENT OF THE BONDS AND OTHER AMOUNTS. The Bonds and
interest and premium, if any, thereon shall be payable solely from (i)
payments made by the Company to the Trustee under Section 4.2(a) hereof,
(ii) amounts realized under the Letter of Credit or any Alternate Credit
Facility and (iii) other moneys on deposit in the Bond Fund and available
therefor.
Payments of principal of, and premium, if any, or interest on, the
Bonds with moneys in the Bond Fund constituting proceeds from the sale of
the Bonds or earnings on investments made under the provisions of the
Indenture shall be credited against the obligation to pay required by
Section 4.2(a) hereof, and the obligation to pay required by Section 4.2(a)
hereof shall be deemed to be satisfied and discharged to the extent of the
corresponding payment made to the Trustee under the Letter of Credit or any
Alternate Credit Facility.
Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same
upon the request of the Company and such redemption (unless conditional)
shall be made from payments made by the Company to the Trustee under Section
4.2(a) hereof and amounts realized under the Letter of Credit or any
Alternate Credit Facility equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon
redemption or acceleration or upon provision for payment in accordance with
Article VIII of the Indenture), payments shall be deemed paid to the extent
such payment or provision therefor has been made and is considered to be a
payment of principal of, or premium, if any, or interest on, such Bonds. If
such Bonds are
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thereby deemed paid in full, the Trustee shall notify the Company and the
Issuer that such payment requirement has been satisfied. Subject to the
foregoing, or unless the Company is entitled to a credit under this
Agreement or the Indenture, all payments shall be in the full amount
required by Section 4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Company agrees that during the term
of this Agreement, it will maintain its corporate existence and its good
standing in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation unless (a) the acquirer of its assets or the corporation
with which it shall consolidate or into which it shall merge shall (i) be a
corporation organized under the laws of one of the states of the United
States of America, (ii) be qualified to do business in the State, (iii) be a
public utility, and (iv) assume in writing all of the obligations of the
Company under this Agreement and the Tax Agreement.
Any transfer of all or substantially all of the Company's assets to any
of its wholly owned subsidiaries shall not be deemed to constitute a
"disposition of all or substantially all of the Company's assets" within the
meaning of the preceding paragraph. Any such transfer of the Company's
assets shall not relieve the Company of any of its obligations under this
Agreement.
SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have an annual
audit made by its regular independent certified public accountants and to
furnish the Trustee (within 30 days after receipt by the Company) with a
balance sheet and statement of income and surplus showing the financial
condition of the Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Company and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
a report of said accountants that such statements have been prepared in
accordance with generally accepted accounting principles. The Company's
obligations under this Section 5.2 may be satisfied by delivering a copy of
the Company's Annual Report to the Trustee at the same time that it is
mailed to stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; ETC. The
Company shall maintain or cause to be maintained the Project in good repair
and keep it properly insured and shall promptly pay or cause to be paid all
costs thereof. The Company shall promptly pay or cause to be paid all
installments of taxes, installments of special assessments, and all
governmental, utility and other charges with respect to the Project, when
due. The Company may, at its own expense and in its own name in good faith
contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or
other charges, or installments thereof, to remain unpaid if such nonpayment
shall subject the Project or any part thereof to loss or forfeiture.
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SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS. The Company shall
cause such security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to time to be
kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve, protect and perfect the security
of the Owners of the Bonds and the rights of the Trustee and, after payment
in full of the Bonds as provided in the Indenture, the rights of the Bank
Group provided in the Indenture, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.04 of the Indenture to the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for
the purposes of the Company or needs of the Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT. The
Issuer and the Company agree that title to the Project shall be in and
remain in the Company, and that the Project shall be the sole property of
the Company in which the Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and
to the extent set forth in Section 2.03 of the Indenture. In the event the
Company elects to exercise any such option, the Company agrees that it shall
cause notices of adjustments of Rate Periods (or rescissions thereof) to be
given to the Issuer, the Trustee and the Remarketing Agent in accordance
with Section 2.03(a), (b), (c), (d) or (f) of the Indenture.
SECTION 5.8. INFORMATION REPORTING, ETC.. The Issuer covenants and
agrees that, upon the direction of the Company or Bond Counsel, it will mail
or cause to be mailed to the Secretary of the Treasury (or his designee as
prescribed by regulation, currently the Internal Revenue Service Center,
Philadelphia, PA 19255) a statement setting forth the information required
by Section 149(e) of the Code, which statement shall be in the form of the
Information Return for Tax-Exempt Private Activity Bond Issues (Form 8038)
of the Internal Revenue Service (or any successor form) and which shall be
completed by the Company and Bond Counsel based in part upon information
supplied by the Company and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise
incurred in connection with the issuance of the Bonds (including without
limitation any liability created by or arising out of the representations,
warranties or covenants set forth herein or otherwise) shall not impose a
debt or pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or a charge upon the general credit or taxing powers of
any of the foregoing, but shall be payable solely out of the Revenues or
other amounts payable by the Company to the Issuer hereunder or otherwise
(including without limitation any amounts derived from indemnifications
given by the Company).
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Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the
State or any political subdivision thereof to levy any form of taxation
therefor or to make any appropriation for their payment. Nothing in the
Bonds or in the Indenture or this Agreement or the proceedings of the Issuer
authorizing the Bonds or in the Act or in any other related document shall
be construed to authorize the Issuer to create a debt of the Issuer or the
State or any political subdivision thereof within the meaning of any
constitutional or statutory provision of the State. The principal of, and
premium, if any, and interest on, the Bonds shall be payable solely from the
funds pledged for their payment in accordance with the Indenture and
available therefor under this Agreement, the Letter of Credit and any
Alternate Credit Facility. Neither the State nor any political subdivision
thereof shall in any event be liable for the payment of the principal of,
premium, if any, or interest on, the Bonds or for the performance of any
pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or
agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political
subdivision thereof.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that the
Issuer and the Trustee and their duly authorized representatives shall have
the right at all reasonable times to enter upon and examine and inspect the
Project property and shall also be permitted, at all reasonable times, to
examine the books and records of the Company insofar as they relate to the
Project.
SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while the Letter of Credit is in effect, the
Company shall not and shall not allow any Insider of the Company to purchase
any Bonds except (a) with Available Moneys or (b) as provided in Section
4.2(b) hereof. At any time while the Letter of Credit is in effect, the
Issuer shall not and shall not allow any Insider of the Issuer to purchase
any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Agreement and the terms "event of default" or
"default" shall mean, whenever they are used in this Agreement, any one or
more of the following events:
(a) Failure by the Company to pay when due any amounts required
to be paid under Section 4.2(a) hereof, which failure results in an
event of default under subparagraph (a) or (b) of Section 9.01 of the
Indenture; or
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<PAGE>
(b) Failure by the Company to pay or cause to be paid any payment
required to be paid under Section 4.2(b) hereof, which failure results
in an event of default under subparagraph (c) of Section 9.01 of the
Indenture; or
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in
Section 4.5(a) of this Agreement, including without limitation failure
by the Company to provide the Trustee with a Letter of Credit or
Alternate Credit Facility on or before 10:30 a.m., New York time, on
the fifth Business Day preceding the date the then existing Letter of
Credit or Alternate Credit Facility is to expire; or
(d) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) and (c) above, for a
period of 90 days after written notice, or in the case of failure by
the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed in Section 4.2(h)
hereof, for a period of 30 days after written notice, specifying such
failure and requesting that it be remedied and stating that such notice
is a "Notice of Default" hereunder, given to the Company by the Trustee
or to the Company and the Trustee by the Issuer, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior
to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the Issuer and
the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted within the
applicable period and diligently pursued until the failure is corrected
and such corrective action or diligent pursuit is evidenced to the
Trustee by a certificate of an Authorized Company Representative; or
(e) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction seeking (i) liquidation, reorganization, dissolution,
winding-up or composition or adjustment of debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and
such proceeding or cause shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered against the
Company in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or
(f) The Company shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in
voluntary bankruptcy or shall make any general assignment for the
benefit of its creditors, or shall consent to the appointment of a
receiver or trustee of all or substantially all of its property, or
shall commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of competent
jurisdiction a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or
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<PAGE>
adjustment of debts, or shall fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under such Bankruptcy Code or
other applicable law; or
(g) Dissolution or liquidation of the Company; provided that the
term "dissolution or liquidation of the Company" shall not be construed
to include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.1 hereof; or
(h) The occurrence of an "event of default" under the Indenture.
The foregoing provisions of Section 6.1(d) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole
or in part to carry out its agreements on its part herein contained, other
than the obligations on the part of the Company contained in Article IV and
Sections 5.3 and 6.4 hereof, the Company shall not be deemed in default
during the continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within
the discretion of the Company and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is
in the sole judgment of the Company unfavorable to the Company.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company, declare the
unpaid indebtedness under Section 4.2(a) hereof to be due and payable
immediately, if concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and
payable, and upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in the Bond
Fund, to pay the unpaid principal of, premium, if any, and interest
accrued on, the Bonds) shall become and shall be immediately due and
payable as liquidated damages; and
(b) may take whatever action at law or in equity as may appear
necessary or desirable to collect the payments and other amounts then
due and thereafter to become due hereunder or to enforce performance
and observance of any obligation, agreement or covenant of the Company
under this Agreement.
Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance
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with the provisions of the Indenture. No action taken pursuant to this
Section 6.2 shall relieve the Company from the Company's obligations
pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the
Company as such, either directly or through the Company, under any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and
6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Issuer or the Trustee
to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein
expressly required. Subject to the provisions of the Indenture and hereof,
such rights and remedies as are given the Issuer hereunder shall also
extend to the Trustee. The Owners of the Bonds, subject to the provisions
of the Indenture, shall be entitled to the benefit of all covenants and
agreements herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ Counsel or incur other
expenses for the collection of the indebtedness hereunder or the enforcement
of performance or observance of any obligation or agreement on the part of
the Company herein contained, the Company agrees that it will on demand
therefor pay to the Trustee, the Issuer or, if so directed by the Issuer, to
the Counsel for the Issuer, the reasonable fees of such Counsel and such
other expenses so incurred by or on behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. No waiver shall be effective
unless in writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company without
both the consent of the Trustee and the Bank to such waiver. The Trustee
and the Bank shall have the power to waive any default by the Company
hereunder, except a default under Section 3.4, 4.2(e), 4.2(g), 5.3 or 6.4
hereof, in so far as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee
pursuant to Section 9.02 of the Indenture, (i) all arrears of principal of
and interest on the outstanding
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Bonds and interest on overdue principal and (to the extent permitted by law)
on overdue installments of interest at the rate of interest borne by the
Bonds on the date on which such principal or interest became due and payable
and the premium, if any, on all Bonds then Outstanding which have become due
and payable otherwise than by acceleration, and all other sums payable under
the Indenture, except the principal of and the interest on such Bonds which
by such acceleration shall have become due and payable, shall have been
paid, (ii) all other things shall have been performed in respect of
which there was a default, (iii) there shall have been paid the reasonable
fees and expenses of the Trustee and of the Owners of such Bonds, including
reasonable attorneys' fees paid or incurred and (iv) such event of default
under the Indenture shall be waived in accordance with Section 9.09 of the
Indenture with the consequence that such acceleration under Section 9.02
of the Indenture is rescinded, then the Company's default hereunder shall be
deemed to have been waived and its consequences rescinded and no further
action or consent by the Trustee or the Issuer or the Bank shall be
required; provided that there has been furnished an opinion of Bond Counsel
to the effect that such waiver will not adversely affect the exemption from
federal income taxes of interest on the Bonds.
ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part
at any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to
provide for the defeasance of the Bonds pursuant to Article VIII of the
Indenture. In the event the Company elects to provide for the redemption of
Bonds as permitted by this Section, the Company shall notify and instruct
the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in advance of maturity. If the Company so elects, any
redemption of Bonds pursuant to Section 3.01(A) of the Indenture may be made
conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for
redemption in accordance with the Indenture or become subject to mandatory
redemption, it will prepay the indebtedness hereunder in whole or in part,
prior to the date on which notice of such redemption is given to the owners
of such Bonds, in an amount sufficient to redeem such Bonds on the date
fixed for the redemption of the Bonds.
SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of
the Bonds in accordance with Section 3.01(B) of the Indenture, the Company
shall give written notice to the Issuer, the Bank, the Remarketing Agent and
the Trustee. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the retirement of the
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Bonds in whole or in part pursuant to call for redemption and shall be given
by the Company not less than 35 days prior to the date of the redemption
which is to occur as a result of such prepayment (or such later date as is
acceptable to the Trustee and the Issuer), and in the case of a redemption
of Bonds pursuant to Section 3.01(B) of the Indenture shall be given on a
date which will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for redemption of
the Bonds or portions thereof, there shall be deposited with the Trustee
from drawings upon the Letter of Credit or payments by the Company or from
amounts realized under any Alternate Credit Facility as required by Section
7.1 or 7.2, as appropriate, for payment into the Bond Fund. Any other
provision of this Agreement or the Indenture to the contrary
notwithstanding, any prepayment of moneys hereunder shall be made in such
manner and at such time that any redemption of Bonds or portions thereof
will be made with Available Moneys.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be
sufficiently given if in writing and shall be deemed given when mailed by
first class mail, postage prepaid, or by qualified overnight courier
service, courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: if to the Issuer, at 500 South
Grand Central Parkway, 6th Floor (89106), P.O. Box 551601, Las Vegas, Nevada
89155-1601, or to telecopy number (702) 455-3558, Attention: County Manager;
if to the Company, at P.O. Box 230, 6226 West Sahara Avenue, Las Vegas,
Nevada 89151, or to telecopy number (702) 367-5629, Attention: Treasurer; if
to the Trustee, at 114 West 47th Street, New York, New York 10036-1532 or to
telecopy number (212) 852-1625 Attention: Corporate Trust Administration;
if to the Remarketing Agent, at 3 World Financial Center, Eighth Floor, 200
Vesey Street, New York, New York 10285, Attention: Short-Term municipal
Department, or to telecopy number (212) 528-0821; and if to the Bank or the
Bank Agent, at 75 Wall Street, New York, New York 10265, Attention: Trade
Services Group, or to telecopy number (212) 412-5111. In case by reason of
the suspension of regular mail service, it shall be impracticable to give
notice by first class mail of any event to the Issuer, to the Company, to
the Remarketing Agent, to the Bank or to the Bank Agent when such notice is
required to be given pursuant to any provisions of this Agreement, then any
manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be sufficient giving of such notice. The Issuer, the Company,
the Trustee, the Remarketing Agent, the Bank and the Bank Agent may, by
notice pursuant to this Section 8.1, designate any different addresses to
which subsequent notices, certificates or other communications shall be
sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by
either party without consent of the other and the Bank or the Bank Agent,
except that the Issuer shall assign to the Trustee its rights under this
Agreement (except under Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as
provided by Section 4.4 hereof, and the Company may assign its
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rights under this Agreement to any transferee or any surviving or resulting
corporation as provided by Section 5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties hereto that after payment in full of (i) the Bonds (or provision
for payment thereof having been made in accordance with the provisions of
the Indenture), (ii) the fees, charges and expenses of the Trustee in
accordance with the Indenture, (iii) the Administrative Expenses, (iv) the
fees and expenses of the Remarketing Agent and the Issuer and (v) all other
amounts required to be paid under this Agreement and the Indenture, any
amounts remaining in the Bond Fund shall belong to and be paid to the
Company by the Trustee; provided, however, that if there remain
reimbursement or other obligations of the Company under the Reimbursement
Agreement, such moneys remaining in the Bond Fund shall, subject to Section
13.10(b) of the Indenture, be paid by the Trustee to the Bank Agent upon
written direction of the Bank Agent to such extent.
SECTION 8.6. AMENDMENTS, CHANGES, AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee and the Bank thereto is obtained. Subject to the
written consent of the Trustee and the Bank, the Issuer and the Company
agree to enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this Agreement or the
Indenture, (ii) for the purpose of curing any ambiguity, formal defect or
omission in this Agreement, (iii) so as to add additional rights acquired
in accordance with the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or any of
them, or (v) in connection with any other change herein which is not to the
prejudice of the Trustee, the Bank or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely
and only out of funds provided or to be provided by the Company) or
surrender or abdicate in whole or in part any of its essential governmental
functions or powers or any of its discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Company is required to take some action at the request of the other, such
approval of such request shall
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be given for the Issuer by the Authorized Issuer Representative and for the
Company by the Authorized Company Representative, and the other party hereto
and the Trustee shall be authorized to act on any such approval or request
and neither party hereto shall have any complaint against the other or
against the Trustee as a result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from its date to and including such date as all of the
Bonds issued under the Indenture shall have been fully paid or retired (or
provision for such payment shall have been made as provided in the
Indenture), provided that all representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds and
the covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f),
4.2(g) and 4.2(h) hereof shall survive the termination of this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of
all other fees and charges having been made in accordance with the
provisions of this Agreement and the Indenture, the Issuer shall deliver to
the Company any documents and take or cause the Trustee to take such actions
as may be necessary to effectuate the cancellation and evidence the
termination of this Agreement.
SECTION 8.11. REFERENCES TO BANK AND PROVIDER. At any time that the
Letter of Credit (and if at such time there shall be no Pledged Bonds) or
any Alternate Credit Facility is not in effect and the Bank Group shall have
been paid all amounts owed them under the Reimbursement Agreement (as
evidenced by a written certificate of the Bank Agent delivered to the
Trustee to such effect), all references herein to the Bank or the Bank Agent
or the Bank Group or the Provider, as the case may be, shall be deemed
ineffective. Any provisions hereof requiring the consent of the Bank or the
Bank Agent or the Bank Group or the Provider shall be deemed ineffective if
the Bank or the Provider is at any such time in default in its obligations
under the Letter of Credit or the Alternate Credit Facility, as the case may
be, to find a drawing thereunder made in strict compliance with the terms of
such Letter of Credit or Alternate Credit Facility.
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By YVONNE ATKINSON GATES
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
LORETTA BOWMAN
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
- --------------------------------
Secretary
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By STEVEN W. RIGAZIO
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
RICHARD L. HINCKLEY
- --------------------------------
Secretary
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<PAGE>
<PAGE>
Series D
--------
============================================================================
FINANCING AGREEMENT
Dated as of October 1, 1995
By and Between
CLARK COUNTY, NEVADA
and
NEVADA POWER COMPANY
RELATING TO
POLLUTION CONTROL REFUNDING REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1995D
============================================================================
The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g),
5.3 and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and
certain other rights of the Issuer under this Financing Agreement have been
pledged and assigned under the Indenture of Trust dated as of October 1,
1995, between the Issuer and United States Trust Company of New York, as
Trustee.
<PAGE>
FINANCING AGREEMENT
-------------------
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference).
SECTION HEADING PAGE
ARTICLE I DEFINITIONS ............................................ 1
ARTICLE II REPRESENTATIONS ........................................ 6
Section 2.1. Representations and Covenants by the Issuer .......... 6
Section 2.2. Representations by the Company ....................... 7
ARTICLE III ISSUANCE OF THE BONDS .................................. 7
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds ............................................. 7
Section 3.2. Deposit of Additional Funds by Company; Redemption
of Prior Bonds ....................................... 8
Section 3.3. Investment of Moneys in the Bond Fund and the
Prior Bonds Redemption Fund .......................... 8
Section 3.4. Tax Exempt Status of Bonds ........................... 9
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT ...................... 9
Section 4.1. Loan of Bond Proceeds ................................ 9
Section 4.2. Loan Repayments and Other Amounts Payable ............ 10
Section 4.3. No Defense or Set-Off ................................ 11
Section 4.4. Payments Pledged and Assigned ........................ 12
Section 4.5. Letter of Credit and Alternate Credit Facility ....... 12
Section 4.6. Payment of the Bonds and Other Amounts ............... 13
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS ....................... 14
Section 5.1. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted .......... 14
Section 5.2. Annual Statement ..................................... 14
Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc. ....... 14
Section 5.4. Recordation and Other Instruments .................... 14
Section 5.5. No Warranty by the Issuer ............................ 15
Section 5.6. Agreement as to Ownership and Use of the Project ..... 15
Section 5.7. Company to Furnish Notice of Adjustments of
Interest Rate Periods ................................ 15
Section 5.8. Information Reporting, Etc. .......................... 15
Section 5.9. Limited Liability of Issuer .......................... 15
Section 5.10. Inspection of Project ................................ 16
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<PAGE>
Section 5.11. Purchases of Bonds by Company or Issuer Prohibited;
Exceptions ........................................... 16
Article VI EVENTS OF DEFAULT AND REMEDIES ......................... 16
Section 6.1. Events of Default Defined ............................ 16
Section 6.2. Remedies on Default .................................. 18
Section 6.3. No Remedy Exclusive .................................. 18
Section 6.4. Agreement to Pay Fees and Expenses of Counsel ........ 19
Section 6.5. No Additional Waiver Implied by One Waiver;
Consents to Waivers .................................. 19
Article VII OPTIONS AND OBLIGATIONS OF COMPANY; PREPAYMENTS;
REDEMPTION OF BONDS .................................... 20
Section 7.1. Option to Prepay ..................................... 20
Section 7.2. Obligation to Prepay ................................. 20
Section 7.3. Notice of Prepayment ................................. 20
Article VIII MISCELLANEOUS .......................................... 21
Section 8.1. Notices .............................................. 21
Section 8.2. Assignments .......................................... 21
Section 8.3. Severability ......................................... 21
Section 8.4. Execution of Counterparts ............................ 21
Section 8.5. Amounts Remaining in Bond Fund ....................... 21
Section 8.6. Amendments, Changes and Modifications ................ 22
Section 8.7. Governing Law ........................................ 22
Section 8.8. Authorized Issuer and Company Representatives ........ 22
Section 8.9. Term of the Agreement ................................ 22
Section 8.10. Cancellation at Expiration of Term ................... 22
Section 8.11. References to Bank and Provider ...................... 23
Signature ............................................................... 24
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<PAGE>
Series D
--------
THIS FINANCING AGREEMENT made and entered into as of October 1, 1995,
by and between CLARK COUNTY, NEVADA, a political subdivision of the State of
Nevada, party of the first part (hereinafter referred to as the "Issuer"),
and NEVADA POWER COMPANY, a corporation duly organized and existing under
the laws of the State of Nevada, party of the second part (hereinafter
referred to as the "Company"),
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall not constitute or give rise to a
pecuniary liability or a charge upon its general credit or against its
taxing powers but shall be payable solely out of the Revenues (as
hereinafter defined) derived from this Financing Agreement and the Bonds, as
hereinafter defined):
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise. The singular shall include
the plural and the masculine shall include the feminine.
"Act" means the County Economic Development Revenue Bond Law, as
amended, contained in Sections 244A.669 to 244A.763, inclusive, of the
Nevada Revised Statutes.
"Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.
"Agreement" means this Financing Agreement by and between the Issuer
and the Company, as from time to time amended and supplemented.
"Alternate Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Alternate Credit Facility
delivered to the Trustee in connection therewith, provided in accordance
with Section 4.5 of this Agreement.
"Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the Issuer, the Remarketing Agent and the Trustee
containing the specimen signature of such person and
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signed on behalf of the Company by any officer of the Company. Such
certificate may designate an alternate or alternates.
"Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished
to the Company and the Trustee containing the specimen signature of such
person and signed on behalf of the Issuer by its Chair. Such certificate
may designate an alternate or alternates.
"Bank" means Societe Generale, acting through its Los Angeles Branch,
in its capacity as issuer of the Letter of Credit, its successors in such
capacity, and its assigns. If an Alternate Credit Facility in the form of a
letter of credit has been issued and delivered in accordance with Section
4.5 of this Agreement, "Bank" shall mean the Provider of such Alternate
Credit Facility, if in the form of a letter of credit, in its capacity as
issuer of such Alternate Credit Facility, its successors in such capacity,
and its assigns.
"Bank Agent" means Societe Generale, acting through its Los Angeles
Branch, in its capacity as agent for the Bank Group, and its successors in
such capacity; provided, however, if there is no party acting as agent under
the Reimbursement Agreement, "Bank Agent" shall mean the Bank.
"Bank Group" means the banks party to the Reimbursement Agreement,
including the Bank.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978, as amended from time to time, or any substitute or replacement
legislation.
"Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02
of the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized
municipal bond counsel mutually acceptable to the Issuer, the Trustee, the
Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the Indenture.
"Business Day" means a day on which banks located in the city in which
the Principal Office of the Trustee is located and in the city or cities in
which any office at which any action must be instituted or taken in order to
realize upon the Letter of Credit or an Alternate Credit Facility then in
effect is or are located, are not required or authorized to remain closed
and on which the New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations promulgated or proposed thereunder.
"Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee
corporation as permitted in Section 5.1 hereof.
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"Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all expenses (including fees and expenses of Counsel)
incurred under the Indenture and the Tax Agreement other than Ordinary
Services and Ordinary Expenses.
"First Mortgage Indenture" means that certain Indenture of Mortgage and
Deed of Trust, dated as of October 1, 1953, from Southern Nevada Power Co.
(now Nevada Power Company) to Bankers Trust Company (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), as trustee, as supplemented, modified or amended from time to
time or at any time by supplemental indentures.
"Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of
their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; lightning; earthquakes; fires;
tornadoes; volcanoes; storms; droughts; floods; explosions, breakage, or
malfunction or accident to machinery, transmission lines, pipes or canals,
even if resulting from negligence; civil disturbances; or any other cause
not reasonably within the control of the Company.
"Governing Body" means the Board of County Commissioners of the Issuer.
"Hereof," "herein," "hereunder" and other words of similar import refer
to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and United States Trust Company of New York, as Trustee,
of even date herewith, pursuant to which the Bonds are authorized to be
issued, including any indentures supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy Code.
"Issuer" means Clark County, Nevada, and any successor body to the
duties or functions of the Issuer.
"Letter of Credit" means the irrevocable direct-pay Letter of Credit
issued by the Bank to the Trustee, including any extensions thereof,
contemporaneously with the issuance of the Bonds, provided that upon the
issuance and delivery of an Alternate Credit Facility in the form of a
letter of credit in accordance with Section 4.5 of this Agreement, "Letter
of Credit" shall mean such Alternate Credit Facility, if in the form of a
letter of credit, instead of the letter of credit for which such Alternate
Credit Facility has been substituted.
"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and, if such
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corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer
to any other nationally recognized securities rating agency designated by
the Company and acceptable to the Bank Agent, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered and those expenses including fees and expenses of Counsel,
normally incurred by a trustee or paying agent under instruments similar to
the Indenture and the Tax Agreement.
"Original Purchaser" means Goldman, Sachs & Co., Lehman Brothers, Inc.,
M. R. Beal & Company and Artemis Capital Group, Inc.
"Owner" or "owner of Bonds" means the Person or Persons in whose name
or names a Bond shall be registered on books of the Issuer kept by the
Registrar for that purpose in accordance with the terms of the Indenture.
"Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.
"Prior Bonds" means the Series 1974 Bonds and the Series 1977 Bonds.
"Project" means the Series 1974 Project and the Series 1977 Project.
"Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with
respect to certain facts which are within the knowledge of the Company and
certain reasonable assumptions of the Company, to enable Chapman and Cutler,
as Bond Counsel, to determine that interest on the Bonds is not includable
in the gross income of the Owners of the Bonds for federal income taxes
purposes.
"Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement and Section 6.16 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995, among the Company, the Bank Agent,
the Bank and the Bank Group, pursuant to which the initial Letter of Credit
is issued, and any subsequent reimbursement agreement between the Company
and a Bank pursuant to which a subsequent Letter of Credit is issued by the
Bank and delivered to the Trustee, and in each case any and all
modifications, amendments and supplements thereto.
"Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.11 of the Indenture and any permitted successor thereto.
"Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of
the following: (i) all amounts payable from time to time by the Company
under Section 4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
including all moneys drawn by the Trustee under the Letter of Credit to pay
the
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principal of and premium, if any, and interest on the Bonds and all amounts
realized by the Trustee from any Alternate Credit Facility to pay the
principal of and premium, if any, and interest on the Bonds, all of which
amounts are to be deposited in the Bond Fund, and (ii) any portion of the
net proceeds of the Bonds deposited with the Trustee in the Bond Fund under
Section 6.03 of the Indenture.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of
New York, its successors and their assigns, and if such division or
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Company and acceptable to the Bank Agent, with notice to the Trustee.
"Series 1974 Agreement" means the Sublease Agreement, dated as of March
1, 1974, between the Issuer and the Company relating to the Series 1974
Bonds.
"Series 1974 Bonds" means the Issuer's 6-3/8% Pollution Control Revenue
Bonds (Nevada Power Company Project) Series 1974, currently outstanding
in the aggregate principal amount of $14,000,000.
"Series 1974 Bond Fund" means the fund established pursuant to Section
5.02 of the Series 1974 Indenture.
"Series 1974 Indenture" means the Indenture of Trust, dated as of
March 1, 1974, between the Issuer and the Series 1974 Trustee, pursuant to
which the Series 1974 Bonds were issued.
"Series 1974 Project" means the "Project" as defined in the Series 1974
Agreement.
"Series 1974 Trustee" means NationsBank of Tennessee (formerly Commence
Union Bank), as trustee under the Series 1974 Indenture.
"Series 1977 Agreement" means the Financing Agreement, dated as of May
1, 1977, between the Issuer and the Company, relating to the Series 1977
Bonds.
"Series 1977 Bonds" means the Issuer's 6-3/4% Collateralized Pollution
Control Revenue Bonds (Nevada Power Company Project) Series 1977, currently
outstanding in the aggregate principal amount of $6,300,000.
"Series 1977 Bond Fund" means the fund established pursuant to Section
5.02 of the Series 1977 Indenture.
"Series 1977 Indenture" means the Indenture of Trust, dated as of
May 1, 1977, between the Issuer and the Series 1977 Trustee, pursuant to
which the Series 1977 Bonds were issued.
"Series 1977 Project" means the "Project" as defined in the Series 1977
Agreement.
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"Series 1977 Trustee" means First Interstate Bank of Nevada, N.A.
(formerly Nevada National Bank), as trustee under the Series 1977 Indenture.
"State" means the State of Nevada.
"Tax Agreement" means the Tax Exemption Certificate and Agreement with
respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.
"Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.
"Trustee" means United States Trust Company of New York, as Trustee
under the Indenture, and any successor Trustee appointed pursuant to Section
10.06 or 10.09 of the Indenture at the time serving as Trustee thereunder,
and any separate or co-trustee serving as such thereunder.
All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE ISSUER. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing political
subdivision of the State of Nevada. Under the provisions of the Act,
the Issuer is authorized to enter into the transactions contemplated by
this Agreement, the Indenture and the Tax Agreement and to carry out
its obligations hereunder and thereunder. The Issuer has duly
authorized the execution and delivery of this Agreement, the Indenture
and the Tax Agreement.
(b) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's interests in this
Agreement and the Revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned as security for payment of the
principal of, premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that the issuance
of the Bonds will further the public purposes of the Act.
(d) The Issuer has not assigned and will not assign any of its
interests in this Agreement other than pursuant to the Indenture.
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(e) No member of the Governing Body of the Issuer, nor any other
officer of the Issuer, has any interest, financial, employment or
other, in the Company or in the transactions contemplated hereby.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Company is a corporation duly incorporated under the laws
of the State and is in good standing in the State, is qualified to do
business as a foreign corporation in all other states and jurisdictions
wherein the nature of the business transacted by the Company or the
nature of the property owned or leased by it makes such licensing or
qualification necessary, has power to enter into and by proper
corporate action has been duly authorized to execute and deliver this
Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the
Tax Agreement, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any corporate restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes a
default under any of the foregoing, or results in the creation or
imposition of any lien, charge or encumbrance whatsoever upon any of
the property or assets of the Company under the terms of any instrument
or agreement other than the Indenture.
(c) The statements, information and descriptions contained in the
Project Certificate and the Tax Agreement, as of the date hereof and at
the time of the delivery of the Bonds to the Original Purchaser, are
and will be true, correct and complete, do not and will not contain any
untrue statement or misleading statement of a material fact, and do not
and will not omit to state a material fact required to be stated
therein or necessary to make the statements, information and
descriptions contained therein, in the light of the circumstances under
which they were made, not misleading.
ARTICLE III
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
In order to provide funds to lend to the Company to refund the Prior Bonds
as provided in Section 4.1 hereof, the Issuer agrees that it will issue
under the Indenture, sell and cause to be delivered to the Original
Purchaser thereof, its Bonds in the aggregate principal amount of
$20,300,000, bearing interest and maturing as set forth in the Indenture.
The Issuer will thereupon deposit the proceeds received from the sale of the
Bonds as follows: (1) in the Bond Fund, a sum equal to any accrued interest
paid by the Original Purchaser of the Bonds; and (2) $20,300,000 of the
proceeds from the sale of the Bonds in the Prior Bonds Redemption Fund to be
remitted by the Trustee as follows: (a) $14,000,000 of the proceeds from
the sale of the Bonds to be transferred at the direction of the Company to
be used to pay to the owners thereof the principal of the Series 1974 Bonds
upon redemption thereof (or to reimburse the Company
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therefor); and (b) $6,300,000 of the proceeds from the sale of Bonds to the
Series 1977 Trustee for deposit in the Series 1977 Bond Fund to be used to
pay to the owners thereof the principal of the Series 1977 Bonds upon
redemption thereof.
SECTION 3.2. DEPOSIT OF ADDITIONAL FUNDS BY COMPANY; REDEMPTION OF
PRIOR BONDS. The Company covenants that such additional amounts as may be
required to redeem the Series 1974 Bonds and the Series 1977 Bonds will be
deposited with the Series 1974 Trustee and the Series 1977 Trustee, as the
case may be, pursuant to the Series 1974 and the Series 1997 Indenture, as
the case may be, for such purpose. Income derived from the investment of
the proceeds of the Bonds deposited in the Prior Bonds Redemption Fund will
be used, pro rata, to satisfy the obligations of the Company specified in
this Section 3.2 in connection with the Series 1974 Bonds and the Series
1977 Bonds. The Company covenants that it will cause the Series 1977 Bonds
to be redeemed within 90 days after the issuance and delivery of the Bonds.
SECTION 3.3. INVESTMENT OF MONEYS IN THE BOND FUND AND THE PRIOR BONDS
REDEMPTION FUND. Except as otherwise herein provided, any moneys held as a
part of the Bond Fund and the Prior Bonds Redemption Fund shall be invested
or reinvested by the Trustee at the written direction, or the oral direction
promptly confirmed in writing, of an Authorized Company Representative as to
specific investments, to the extent permitted by law, in:
(a) bonds or other obligations of the United States of America;
(b) bonds or other obligations, the payment of the principal of
and interest on which is unconditionally guaranteed by the United
States of America;
(c) obligations issued or guaranteed as to principal and interest
by any agency or person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(d) obligations issued or guaranteed by any state of the United
States of America, or any political subdivision of any such state, or
in funds consisting of such obligations to the extent described in
Treasury Regulation 1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by commercial
banks;
(h) repurchase agreements fully secured by obligations issued or
guaranteed as to principal and interest by the United States of America
or by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
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(i) certificates of deposit issued by commercial banks, including
banks domiciled outside of the United States of America; and
(j) units of taxable government money market portfolios composed
of obligations guaranteed as to principal and interest by the United
States of America or repurchase agreements fully collateralized by such
obligations.
The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the
interest accruing thereon and any profit realized therefrom shall be
credited to such fund, subject to the provisions of the Tax Agreement. The
Company agrees that to the extent any moneys in the Bond Fund represent
moneys realized under the Letter of Credit or any Alternate Credit Facility
or moneys held for the payment of Bonds pursuant to Sections 6.07 and 6.13
of the Indenture or moneys held for the payment of the purchase price of
Bonds pursuant to Article IV of the Indenture, such moneys shall not be
invested. In addition, the Company agrees that to the extent that any
moneys in the Bond Fund represent moneys to be used to pay the premium
portion of the redemption price of Bonds pursuant to Section 3.01(A)(3) of
the Indenture such moneys shall be invested only in Governmental Obligations
maturing on or before the applicable redemption date or dates.
SECTION 3.4. TAX EXEMPT STATUS OF BONDS. The Company covenants
and agrees that it has not taken or permitted and will not take or permit
any action which results in interest paid on the Bonds being included in
gross income of the holders or beneficial owners of the Bonds for purposes
of federal income taxation (other than a holder or beneficial owner who is a
"substantial user" of the Project or a "related person" within the meaning
of Section 147(a) of the Code). The Company covenants that none of the
proceeds of the Bonds or the payments to be made under this Agreement, or
any other funds which may be deemed to be proceeds of the Bonds pursuant to
Section 148(a) of the Code, will be invested or used in such a way, and that
no actions will be taken or not taken, as to cause the Bonds to be treated
as "arbitrage Bonds" within the meaning of Section 148(a) of the Code.
Without limiting the generality of the foregoing, the Company covenants and
agrees that it will comply with the provisions of the Tax Agreement and the
Project Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale
of the Bonds in order to refund the Prior Bonds and the Company agrees to
apply the gross proceeds of such loan to the refunding of the Prior Bonds.
(b) The Issuer and the Company expressly reserve the right to enter
into, to the extent permitted by law, an agreement or agreements other than
this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to refund all or any principal amount of the Bonds.
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SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE. (a) On each
date provided in or pursuant to the Indenture for the payment (whether at
maturity or upon redemption or acceleration) of principal of, and premium,
if any, and interest on, the Bonds, until the principal of, and premium, if
any, and interest on, the Bonds shall have been fully paid or provision for
the payment thereof shall have been made in accordance with the Indenture,
the Company shall pay to the Trustee in immediately available funds, for
deposit in the Bond Fund, as a repayment installment of the loan of the
proceeds of the Bonds pursuant to Section 4.1(a) hereof, a sum equal to the
amount payable on such date (whether at maturity or upon redemption or
acceleration) as principal of, and premium, if any, and interest on, the
Bonds as provided in the Indenture; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or any Alternate Credit Facility; and
provided further, that the obligation of the Company to make any such
repayment installment shall be reduced by the amount of any moneys then on
deposit in the Bond Fund and available for such payment.
(b) The Company shall pay to the Trustee amounts equal to the amounts
to be paid by the Trustee for the purchase of Bonds pursuant to Article IV
of the Indenture. Such amounts shall be paid by the Company to the Trustee
in immediately available funds on the date such payments pursuant to Section
4.05 of the Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or under any Alternate Credit Facility or
to the extent moneys are available from the source described in clause (i)
of Section 4.05(a) of the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees of the
Trustee for the Ordinary Services rendered by it and an amount equal to the
Ordinary Expenses incurred by it under the Indenture and the Tax Agreement,
as and when the same become due, and (ii) the reasonable fees, charges and
expenses of the Trustee for reasonable Extraordinary Services and
Extraordinary Expenses, as and when the same become due, incurred under the
Indenture and the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable for, and
agrees that it will at all times indemnify and hold harmless the Trustee,
its officers, agents, servants and employees against, and pay all expenses
of the Trustee, its officers, agents, servants and employees, relating to
any lawsuit, proceeding or claim and resulting from any action or omission
taken or made by or on behalf of the Trustee, its officers, agents, servants
and employees pursuant to this Agreement, the Indenture or the Tax
Agreement, that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in
respect of which indemnity may be sought against the Company, the Trustee
shall promptly notify the Company in writing and the Company shall be
entitled to assume control of the defense thereof, including the employment
of Counsel and the payment of all expenses. The Trustee shall have the
right to employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such
action without its consent, but if any such action is settled with the
consent of the Company or if there be final judgment for the plaintiff in
any such action, the Company agrees to indemnify and hold
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harmless the Trustee from and against any loss or liability by reason of
such settlement or final judgment. The Company agrees that the
indemnification provided herein shall survive the termination of this
Agreement or the Indenture or the resignation of the Trustee.
(d) The Company agrees to pay all costs incurred in connection with
the issuance of the Bonds from sources other than Bond proceeds and the
Issuer shall have no obligation with respect to such costs.
(e) The Company agrees to indemnify and hold harmless the Issuer and
any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement, the Indenture or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds. The
Company agrees to pay the Issuer its Closing Fee in connection with the
issuance of the Bonds in the amount of $10,000. The Issuer may submit to
the Company periodic statements, not more frequently than monthly, for its
Administrative Expenses and the Company shall make payment to the Issuer of
the full amount of each such statement within 30 days after the Company
receives such statement.
(f) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent, and the Issuer shall
have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
(g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid and the Company will pay interest to the extent
permitted by law, on any overdue amount at the rate of interest borne by the
Bonds on the date on which such amount became due and payable until paid.
In the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same
with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to
its prime commercial borrowers until paid.
(h) To the extent that the Letter of Credit is in effect and moneys on
deposit in the Bond Fund constitute Available Moneys or have been deposited
in separate, segregated accounts in the Bond Fund for the purpose of
becoming Available Moneys, such moneys shall not be available for transfer
and shall not be transferred from the Bond Fund to the Rebate Fund to
satisfy the requirements of the Tax Agreement (unless the Company fails to
pay the amounts described below). In the event that moneys are not
available for transfer from the Bond Fund to the Rebate Fund as required by
the Tax Agreement, the Company agrees to pay any such amount required to be
so transferred and not available for such purpose in the Bond Fund by paying
such amount to the Trustee for deposit directly into the Rebate Fund. The
obligation of the Company set forth in this Section 4.2(h) shall survive the
termination of this Agreement.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and
unconditional without defense or set-
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off by reason of any default by the Issuer under this Agreement or under any
other agreement between the Company and the Issuer or for any other reason,
it being the intention of the parties that the payments required hereunder
will be paid in full when due without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is understood and
agreed that all payments required to be made by the Company pursuant to
Section 4.2 hereof (except payments made to the Trustee pursuant to Section
4.2(c) hereof, to the Remarketing Agent pursuant to Section 4.2(f) hereof,
to the Issuer pursuant to Section 4.2(e) hereof and to any or all the Issuer
and the Trustee and the Remarketing Agent pursuant to Section 4.2(g) hereof)
and certain rights of the Issuer hereunder are pledged and assigned by the
Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to
be paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent pursuant to Section 4.2(f) hereof and payments to be made
to the Issuer pursuant to Sections 4.2(e) and (g) hereof. The Project will
not constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND ALTERNATE CREDIT FACILITY. (a) The
Company shall arrange for a Letter of Credit or an Alternate Credit Facility
to be in effect at all times with such terms and conditions as required
under Sections 6.14 and 6.15 of the Indenture. Such Letter of Credit or
Alternate Credit Facility must be delivered to the Trustee by the Company
not later than 10:30 a.m., New York time, on the fifth Business Day
preceding the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms.
(b) At any time the Company may, at its option, provide for the
delivery to the Trustee of an Alternate Credit Facility. The Alternate
Credit Facility (a) may consist, at the option of the Company, of (i) first
mortgage bonds of the Company, (ii) a letter of credit, or (iii) such other
security or credit support as the Company may elect to furnish and which is
acceptable to the Issuer, in each case in an amount and having terms
sufficient to support the payment of the principal of and interest on all
Bonds then outstanding and, at the election of the Company, any of its other
obligations under this Agreement, (b) shall have administrative provisions
satisfactory to the Trustee, and (c) shall be for a stated term and shall
not be terminable prior to the end of such term except by action of the
Trustee at the direction of the Company upon the fulfillment of any
requirements of such Alternate Credit Facility and compliance with the
conditions set forth in Section 4.5(c) hereof. The Company shall have an
option, at any time, and from time to time, upon notice given as provided in
Section 4.5(c) hereof, to provide an Alternate Credit Facility in
substitution for the Letter of Credit or another Alternate Credit Facility,
but only in accordance with the provisions of this Section 4.5(b) and
Section 4.5(c) hereof.
(c) As a condition to the exercise by the Company of its option set
forth in Section 4.5(b) hereof to deliver an Alternate Credit Facility, the
Company shall provide to the Issuer, the Trustee and the Remarketing Agent,
at least 20 days prior to the fifth Business Day next preceding the
effective date of such change, a notice specifying (i) that the Letter of
Credit or the Alternate Credit Facility then in effect will be changed, (ii)
the effective date of such change (which must be at least five Business Days
prior to the date the then existing Letter of
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Credit or Alternate Credit Facility is to expire by its terms), (iii) the
form and substance of the Letter of Credit or the Alternate Credit Facility
then in effect, and (iv) the form and substance of the Alternate Credit
Facility to be in effect on the date specified in (ii) above. Such notice
to the Trustee must be accompanied by the opinion of Bond Counsel required
by Sections 6.14 and 6.15 of the Indenture and (i) a letter from Moody's, if
the Bonds should then be rated by Moody's, and from S&P, if the Bonds should
then be rated by S&P, to the effect that the substitution of the proposed
Alternate Credit Facility for the Letter of Credit or the Alternate Credit
Facility then in effect will not by itself result in a reduction, suspension
or withdrawal of its ratings of the Bonds which then prevail (except that
such rating evidence shall not be required if the Bonds are subject to a
mandatory tender for purchase pursuant to Section 4.02(a)(iii) of the
Indenture), and (ii) the form of the substitute Alternate Credit Facility to
be in place on the effective date of such change, together with any
documentation and opinions referred to by Moody's or S&P in any such letter.
(d) The Issuer and the Company agree that the Issuer will in the
Indenture authorize and direct the Trustee to accept and agree to conditions
and provisions of the Letter of Credit and any Alternate Credit Facility
which may be provided in accordance with the provisions of this Section 4.5.
SECTION 4.6. PAYMENT OF THE BONDS AND OTHER AMOUNTS. The Bonds and
interest and premium, if any, thereon shall be payable solely from (i)
payments made by the Company to the Trustee under Section 4.2(a) hereof,
(ii) amounts realized under the Letter of Credit or any Alternate Credit
Facility and (iii) other moneys on deposit in the Bond Fund and available
therefor.
Payments of principal of, and premium, if any, or interest on, the
Bonds with moneys in the Bond Fund constituting proceeds from the sale of
the Bonds or earnings on investments made under the provisions of the
Indenture shall be credited against the obligation to pay required by
Section 4.2(a) hereof, and the obligation to pay required by Section 4.2(a)
hereof shall be deemed to be satisfied and discharged to the extent of the
corresponding payment made to the Trustee under the Letter of Credit or any
Alternate Credit Facility.
Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same
upon the request of the Company and such redemption (unless conditional)
shall be made from payments made by the Company to the Trustee under Section
4.2(a) hereof and amounts realized under the Letter of Credit or any
Alternate Credit Facility equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon
redemption or acceleration or upon provision for payment in accordance with
Article VIII of the Indenture), payments shall be deemed paid to the extent
such payment or provision therefor has been made and is considered to be a
payment of principal of, or premium, if any, or interest on, such Bonds. If
such Bonds are thereby deemed paid in full, the Trustee shall notify the
Company and the Issuer that such payment requirement has been satisfied.
Subject to the foregoing, or unless the Company is entitled to a
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credit under this Agreement or the Indenture, all payments shall be in the
full amount required by Section 4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Company agrees that during the term
of this Agreement, it will maintain its corporate existence and its good
standing in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation unless (a) The acquirer of its assets or the corporation
with which it shall consolidate or into which it shall merge shall (i) be a
corporation organized under the laws of one of the states of the United
States of America, (ii) be qualified to do business in the State, (iii) be a
public utility, and (iv) assume in writing all of the obligations of the
Company under this Agreement and the Tax Agreement.
Any transfer of all or substantially all of the Company's assets to any
of its wholly owned subsidiaries shall not be deemed to constitute a
"disposition of all or substantially all of the Company's assets" within the
meaning of the preceding paragraph. Any such transfer of the Company's
assets shall not relieve the Company of any of its obligations under this
Agreement.
SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have an annual
audit made by its regular independent certified public accountants and to
furnish the Trustee (within 30 days after receipt by the Company) with a
balance sheet and statement of income and surplus showing the financial
condition of the Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Company and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
a report of said accountants that such statements have been prepared in
accordance with generally accepted accounting principles. The Company's
obligations under this Section 5.2 may be satisfied by delivering a copy of
the Company's Annual Report to the Trustee at the same time that it is
mailed to stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; ETC. The
Company shall maintain or cause to be maintained the Project in good repair
and keep it properly insured and shall promptly pay or cause to be paid all
costs thereof. The Company shall promptly pay or cause to be paid all
installments of taxes, installments of special assessments, and all
governmental, utility and other charges with respect to the Project, when
due. The Company may, at its own expense and in its own name in good faith
contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or
other charges, or installments thereof, to remain unpaid if such nonpayment
shall subject the Project or any part thereof to loss or forfeiture.
SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS. The Company shall
cause such security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to time to be
kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve, protect and perfect the security
of the Owners of the Bonds and the rights of the Trustee and, after payment
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in full of the Bonds as provided in the Indenture, the rights of the Bank
Group provided in the Indenture, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.04 of the Indenture to the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for
the purposes of the Company or needs of the Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT. The
Issuer and the Company agree that title to the Project shall be in and
remain in the Company, and that the Project shall be the sole property of
the Company in which the Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and
to the extent set forth in Section 2.03 of the Indenture. In the event the
Company elects to exercise any such option, the Company agrees that it shall
cause notices of adjustments of Rate Periods (or rescissions thereof) to be
given to the Issuer, the Trustee and the Remarketing Agent in accordance
with Section 2.03(a), (b), (c), (d) or (f) of the Indenture.
SECTION 5.8. INFORMATION REPORTING, ETC.. The Issuer covenants and
agrees that, upon the direction of the Company or Bond Counsel, it will mail
or cause to be mailed to the Secretary of the Treasury (or his designee as
prescribed by regulation, currently the Internal Revenue Service Center,
Philadelphia, PA 19255) a statement setting forth the information required
by Section 149(e) of the Code, which statement shall be in the form of the
Information Return for Tax-Exempt Private Activity Bond Issues (Form 8038)
of the Internal Revenue Service (or any successor form) and which shall be
completed by the Company and Bond Counsel based in part upon information
supplied by the Company and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise
incurred in connection with the issuance of the Bonds (including without
limitation any liability created by or arising out of the representations,
warranties or covenants set forth herein or otherwise) shall not impose a
debt or pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or a charge upon the general credit or taxing powers of
any of the foregoing, but shall be payable solely out of the Revenues or
other amounts payable by the Company to the Issuer hereunder or otherwise
(including without limitation any amounts derived from indemnifications
given by the Company).
Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the
State or any political subdivision thereof to levy any form of taxation
therefor or to make any appropriation for their payment. Nothing in the
Bonds or in the Indenture or this Agreement or the proceedings of the Issuer
authorizing the Bonds or in the Act or in any other related document shall
be construed to authorize the Issuer to create a debt of the Issuer or the
State or any political subdivision thereof within the meaning of any
constitutional or statutory provision of the State. The principal of, and
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premium, if any, and interest on, the Bonds shall be payable solely from the
funds pledged for their payment in accordance with the Indenture and
available therefor under this Agreement, the Letter of Credit and any
Alternate Credit Facility. Neither the State nor any political subdivision
thereof shall in any event be liable for the payment of the principal of,
premium, if any, or interest on, the Bonds or for the performance of any
pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or
agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political
subdivision thereof.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that the
Issuer and the Trustee and their duly authorized representatives shall have
the right at all reasonable times to enter upon and examine and inspect the
Project property and shall also be permitted, at all reasonable times, to
examine the books and records of the Company insofar as they relate to the
Project.
SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while the Letter of Credit is in effect, the
Company shall not and shall not allow any Insider of the Company to purchase
any Bonds except (a) with Available Moneys or (b) as provided in Section
4.2(b) hereof. At any time while the Letter of Credit is in effect, the
Issuer shall not and shall not allow any Insider of the Issuer to purchase
any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Agreement and the terms "event of default" or
"default" shall mean, whenever they are used in this Agreement, any one or
more of the following events:
(a) Failure by the Company to pay when due any amounts required
to be paid under Section 4.2(a) hereof, which failure results in an
event of default under subparagraph (a) or (b) of Section 9.01 of the
Indenture; or
(b) Failure by the Company to pay or cause to be paid any payment
required to be paid under Section 4.2(b) hereof, which failure results
in an event of default under subparagraph (c) of Section 9.01 of the
Indenture; or
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in
Section 4.5(a) of this Agreement, including without limitation failure
by the Company to provide the Trustee with a Letter of Credit or
Alternate Credit Facility on or before 10:30 a.m., New York time, on
the fifth Business Day preceding the date the then existing Letter of
Credit or Alternate Credit Facility is to expire; or
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(d) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) and (c) above, for a
period of 90 days after written notice, or in the case of failure by
the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed in Section 4.2(h)
hereof, for a period of 30 days after written notice, specifying such
failure and requesting that it be remedied and stating that such notice
is a "Notice of default" hereunder, given to the Company by the Trustee
or to the Company and the Trustee by the Issuer, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior
to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the Issuer and
the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted within the
applicable period and diligently pursued until the failure is corrected
and such corrective action or diligent pursuit is evidenced to the
Trustee by a certificate of an Authorized Company Representative; or
(e) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction seeking (i) liquidation, reorganization, dissolution,
winding-up or composition or adjustment of debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and
such proceeding or cause shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered against the
Company in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or
(f) The Company shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in
voluntary bankruptcy or shall make any general assignment for the
benefit of its creditors, or shall consent to the appointment of a
receiver or trustee of all or substantially all of its property, or
shall commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of competent
jurisdiction a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or shall fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under such Bankruptcy Code or
other applicable law; or
(g) Dissolution or liquidation of the Company; provided that the
term "dissolution or liquidation of the Company" shall not be construed
to include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.1 hereof; or
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(h) The occurrence of an "event of default" under the Indenture.
The foregoing provisions of Section 6.1(d) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole
or in part to carry out its agreements on its part herein contained, other
than the obligations on the part of the Company contained in Article IV and
Sections 5.3 and 6.4 hereof, the Company shall not be deemed in default
during the continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within
the discretion of the Company and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is
in the sole judgment of the Company unfavorable to the Company.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company, declare the
unpaid indebtedness under Section 4.2(a) hereof to be due and payable
immediately, if concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and
payable, and upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in the Bond
Fund, to pay the unpaid principal of, premium, if any, and interest
accrued on, the Bonds) shall become and shall be immediately due and
payable as liquidated damages; and
(b) may take whatever action at law or in equity as may appear
necessary or desirable to collect the payments and other amounts then
due and thereafter to become due hereunder or to enforce performance
and observance of any obligation, agreement or covenant of the Company
under this Agreement.
Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance with the provisions of the Indenture.
No action taken pursuant to this Section 6.2 shall relieve the Company from
the Company's obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the
Company as such, either directly or through the Company, under any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and
6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other
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remedy given under this Agreement or now or hereafter existing at law or in
equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In
order to entitle the Issuer or the Trustee to exercise any remedy reserved
to it in this Article, it shall not be necessary to give any notice, other
than such notice as may be herein expressly required. Subject to the
provisions of the Indenture and hereof, such rights and remedies as are
given the Issuer hereunder shall also extend to the Trustee. The Owners of
the Bonds, subject to the provisions of the Indenture, shall be entitled
to the benefit of all covenants and agreements herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ Counsel or incur other
expenses for the collection of the indebtedness hereunder or the enforcement
of performance or observance of any obligation or agreement on the part of
the Company herein contained, the Company agrees that it will on demand
therefor pay to the Trustee, the Issuer or, if so directed by the Issuer, to
the Counsel for the Issuer, the reasonable fees of such Counsel and such
other expenses so incurred by or on behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. No waiver shall be effective
unless in writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company without
both the consent of the Trustee and the Bank to such waiver. The Trustee
and the Bank shall have the power to waive any default by the Company
hereunder, except a default under Section 3.4, 4.2(e), 4.2(g), 5.3 or 6.4
hereof, in so far as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee
pursuant to Section 9.02 of the Indenture, (i) all arrears of principal of
and interest on the outstanding Bonds and interest on overdue principal and
(to the extent permitted by law) on overdue installments of interest at the
rate of interest borne by the Bonds on the date on which such principal or
interest became due and payable and the premium, if any, on all Bonds then
Outstanding which have become due and payable otherwise than by
acceleration, and all other sums payable under the Indenture, except the
principal of and the interest on such Bonds which by such acceleration shall
have become due and payable, shall have been paid, (ii) all other things
shall have been performed in respect of which there was a default, (iii)
there shall have been paid the reasonable fees and expenses of the Trustee
and of the Owners of such Bonds, including reasonable attorneys' fees paid
or incurred and (iv) such event of default under the Indenture shall be
waived in accordance with Section 9.09 of the Indenture with the consequence
that such acceleration under Section 9.02 of the Indenture is rescinded,
then the Company's default hereunder shall be deemed to have been waived and
its consequences rescinded and no further action or consent by the Trustee
or the Issuer or the Bank shall be required; provided that there has been
furnished an opinion of Bond Counsel to the effect that such waiver will not
adversely affect the exemption from federal income taxes of interest on the
Bonds.
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ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part
at any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to
provide for the defeasance of the Bonds pursuant to Article VIII of the
Indenture. In the event the Company elects to provide for the redemption of
Bonds as permitted by this Section, the Company shall notify and instruct
the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in advance of maturity. If the Company so elects, any
redemption of Bonds pursuant to Section 3.01(A) of the Indenture may be made
conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for
redemption in accordance with the Indenture or become subject to mandatory
redemption, it will prepay the indebtedness hereunder in whole or in part,
prior to the date on which notice of such redemption is given to the owners
of such Bonds, in an amount sufficient to redeem such Bonds on the date
fixed for the redemption of the Bonds.
SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of
the Bonds in accordance with Section 3.01(B) of the Indenture, the Company
shall give written notice to the Issuer, the Bank, the Remarketing Agent and
the Trustee. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the retirement of the
Bonds in whole or in part pursuant to call for redemption and shall be given
by the Company not less than 35 days prior to the date of the redemption
which is to occur as a result of such prepayment (or such later date as is
acceptable to the Trustee and the Issuer), and in the case of a redemption
of Bonds pursuant to Section 3.01(B) of the Indenture shall be given on a
date which will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for redemption of
the Bonds or portions thereof, there shall be deposited with the Trustee
from drawings upon the Letter of Credit or payments by the Company or from
amounts realized under any Alternate Credit Facility as required by Section
7.1 or 7.2, as appropriate, for payment into the Bond Fund. Any other
provision of this Agreement or the Indenture to the contrary
notwithstanding, any prepayment of moneys hereunder shall be made in such
manner and at such time that any redemption of Bonds or portions thereof
will be made with Available Moneys.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be
sufficiently given if in writing and shall be deemed given when mailed by
first class mail, postage prepaid, or by qualified overnight courier
service, courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: if to the Issuer, at 500 South
Grand Central Parkway, 6th Floor (89106), P.O. Box 551601, Las Vegas, Nevada
89155-1601, or to telecopy number (702) 455-3558, Attention: County Manager;
if to the Company, at P.O. Box 230, 6226 West Sahara Avenue, Las Vegas,
Nevada 89151, or to telecopy number (702) 367-5629, Attention: Treasurer; if
to the Trustee, at 114 West 47th Street, New York, New York 10036-1532 or to
telecopy number (212) 852-1625 Attention: Corporate Trust Administration;
if to the Remarketing Agent, at 85 Broad Street, 24th Floor, New York, New
York 10004, Attention: Municipal Money Markets Desk, or to telecopy number
(212) 346-4209; and if to the Bank or the Bank Agent, at 2029 Century Park
East, Suite 2900, Los Angeles, California 90067, Attention: Minerva Arvisu,
or to telecopy number (310) 203-0539. In case by reason of the suspension
of regular mail service, it shall be impracticable to give notice by first
class mail of any event to the Issuer, to the Company, to the Remarketing
Agent, to the Bank or to the Bank Agent when such notice is required to be
given pursuant to any provisions of this Agreement, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed
to be sufficient giving of such notice. The Issuer, the Company, the
Trustee, the Remarketing Agent, the Bank and the Bank Agent may, by
notice pursuant to this Section 8.1, designate any different addresses to
which subsequent notices, certificates or other communications shall be
sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by
either party without consent of the other and the Bank or the Bank Agent,
except that the Issuer shall assign to the Trustee its rights under this
Agreement (except under Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as
provided by Section 4.4 hereof, and the Company may assign its rights under
this Agreement to any transferee or any surviving or resulting corporation
as provided by Section 5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties hereto that after payment in full of (i) the Bonds (or provision
for payment thereof having been made in accordance with the provisions of
the Indenture), (ii) the fees, charges and expenses of the Trustee in
accordance with the Indenture, (iii) the Administrative Expenses, (iv) the
fees and expenses of the Remarketing Agent and the Issuer and (v) all other
amounts required to be
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<PAGE>
paid under this Agreement and the Indenture, any amounts remaining in the
Bond Fund shall belong to and be paid to the Company by the Trustee;
provided, however, that if there remain reimbursement or other obligations
of the Company under the Reimbursement Agreement, such moneys remaining in
the Bond Fund shall, subject to Section 13.10(b) of the Indenture, be paid
by the Trustee to the Bank Agent upon written direction of the Bank Agent to
such extent.
SECTION 8.6. AMENDMENTS, CHANGES, AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee and the Bank thereto is obtained. Subject to the
written consent of the Trustee and the Bank, the Issuer and the Company
agree to enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this Agreement or the
Indenture, (ii) for the purpose of curing any ambiguity, formal defect or
omission in this Agreement, (iii) so as to add additional rights acquired
in accordance with the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or any of
them, or (v) in connection with any other change herein which is not to the
prejudice of the Trustee, the Bank or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely
and only out of funds provided or to be provided by the Company) or
surrender or abdicate in whole or in part any of its essential governmental
functions or powers or any of its discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Company is required to take some action at the request of the other, such
approval of such request shall be given for the Issuer by the Authorized
Issuer Representative and for the Company by the Authorized Company
Representative, and the other party hereto and the Trustee shall be
authorized to act on any such approval or request and neither party hereto
shall have any complaint against the other or against the Trustee as a
result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from its date to and including such date as all of the
Bonds issued under the Indenture shall have been fully paid or retired (or
provision for such payment shall have been made as provided in the
Indenture), provided that all representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds and
the covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f),
4.2(g) and 4.2(h) hereof shall survive the termination of this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of
all other fees and charges having been made in accordance with the
provisions of this Agreement and the Indenture, the Issuer shall deliver to
the Company any documents and take or cause the Trustee to take such actions
as may be necessary to effectuate the cancellation and evidence the
termination of this Agreement.
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<PAGE>
SECTION 8.11. REFERENCES TO BANK AND PROVIDER. At any time that the
Letter of Credit (and if at such time there shall be no Pledged Bonds) or
any Alternate Credit Facility is not in effect and the Bank Group shall have
been paid all amounts owed them under the Reimbursement Agreement (as
evidenced by a written certificate of the Bank Agent delivered to the
Trustee to such effect), all references herein to the Bank or the Bank Agent
or the Bank Group or the Provider, as the case may be, shall be deemed
ineffective. Any provisions hereof requiring the consent of the Bank or the
Bank Agent or the Bank Group or the Provider shall be deemed ineffective if
the Bank or the Provider is at any such time in default in its obligations
under the Letter of Credit or the Alternate Credit Facility, as the case may
be, to fund a drawing thereunder made in strict compliance with the terms of
such Letter of Credit or Alternate Credit Facility.
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By YVONNE ATKINSON GATES
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
LORETTA BOWMAN
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
- --------------------------------
Secretary
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CLARK COUNTY, NEVADA
By
--------------------------------------
Chair
Board of County Commissioners
(SEAL)
Attest:
- --------------------------------
County Clerk
NEVADA POWER COMPANY
By STEVEN W. RIGAZIO
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
RICHARD L. HINCKLEY
- --------------------------------
Secretary
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<PAGE>
Series E
--------
============================================================================
FINANCING AGREEMENT
Dated as of October 1, 1995
By and Between
COCONINO COUNTY, ARIZONA POLLUTION CONTROL CORPORATION
and
NEVADA POWER COMPANY
RELATING TO
POLLUTION CONTROL REFUNDING REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1995E
============================================================================
The amounts payable to the Issuer (except for amounts payable to, and
certain rights and privileges of, the Issuer under Sections 4.2(e), 4.2(g),
5.3 and 6.4 hereof and any rights of the Issuer to receive any notices,
certificates, requests, requisitions or communications hereunder) and
certain other rights of the Issuer under this Financing Agreement have been
pledged and assigned under the Indenture of Trust dated as of October 1,
1995, between the Issuer and United States Trust Company of New York, as
Trustee.
<PAGE>
FINANCING AGREEMENT
-------------------
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference).
SECTION HEADING PAGE
ARTICLE I DEFINITIONS ............................................ 1
ARTICLE II REPRESENTATIONS ........................................ 6
Section 2.1. Representations and Covenants by the Issuer .......... 6
Section 2.2. Representations by the Company ....................... 6
ARTICLE III ISSUANCE OF THE BONDS .................................. 7
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds ............................................. 7
Section 3.2. Deposit of Additional Funds by Company; Redemption
Series 1976 Bonds .................................... 7
Section 3.3. Investment of Moneys in the Bond Fund and the
Prior Bonds Redemption Fund .......................... 7
Section 3.4. Tax Exempt Status of Bonds ........................... 8
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT ...................... 9
Section 4.1. Loan of Bond Proceeds ................................ 9
Section 4.2. Loan Repayments and Other Amounts Payable ............ 9
Section 4.3. No Defense or Set-Off ................................ 11
Section 4.4. Payments Pledged and Assigned ........................ 11
Section 4.5. Letter of Credit and Alternate Credit Facility ....... 11
Section 4.6. Payment of the Bonds and Other Amounts ............... 12
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS ....................... 13
Section 5.1. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted .......... 13
Section 5.2. Annual Statement ..................................... 14
Section 5.3. Maintenance and Repair; Insurance; Taxes; Etc. ....... 14
Section 5.4. Recordation and Other Instruments .................... 14
Section 5.5. No Warranty by the Issuer ............................ 14
Section 5.6. Agreement as to Ownership and Use of the Project ..... 14
Section 5.7. Company to Furnish Notice of Adjustments of
Interest Rate Periods ................................ 14
Section 5.8. Information Reporting, Etc. .......................... 15
Section 5.9. Limited Liability of Issuer .......................... 15
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<PAGE>
Section 5.10. Inspection of Project ................................ 15
Section 5.11. Purchases of Bonds by Company or Issuer Prohibited;
Exceptions ........................................... 16
Article VI EVENTS OF DEFAULT AND REMEDIES ......................... 16
Section 6.1. Events of Default Defined ............................ 16
Section 6.2. Remedies on Default .................................. 18
Section 6.3. No Remedy Exclusive .................................. 18
Section 6.4. Agreement to Pay Fees and Expenses of Counsel ........ 18
Section 6.5. No Additional Waiver Implied by One Waiver;
Consents to Waivers .................................. 19
Article VII OPTIONS AND OBLIGATIONS OF COMPANY; PREPAYMENTS;
REDEMPTION OF BONDS .................................... 19
Section 7.1. Option to Prepay ..................................... 19
Section 7.2. Obligation to Prepay ................................. 20
Section 7.3. Notice of Prepayment ................................. 20
Article VIII MISCELLANEOUS .......................................... 20
Section 8.1. Notices .............................................. 20
Section 8.2. Assignments .......................................... 21
Section 8.3. Severability ......................................... 21
Section 8.4. Execution of Counterparts ............................ 21
Section 8.5. Amounts Remaining in Bond Fund ....................... 21
Section 8.6. Amendments, Changes and Modifications ................ 21
Section 8.7. Governing Law ........................................ 22
Section 8.8. Authorized Issuer and Company Representatives ........ 22
Section 8.9. Term of the Agreement ................................ 22
Section 8.10. Cancellation at Expiration of Term ................... 22
Section 8.11. References to Bank and Provider ...................... 22
Section 8.12. Notice Regarding Cancellation of Contracts............ 22
Signature ............................................................... 24
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<PAGE>
THIS FINANCING AGREEMENT made and entered into as of October 1, 1995,
by and between COCONINO COUNTY, ARIZONA POLLUTION CONTROL CORPORATION, a
political subdivision of the State of Arizona, party of the first part
(hereinafter referred to as the "Issuer"), and NEVADA POWER COMPANY, a
corporation duly organized and existing under the laws of the State of
Nevada, party of the second part (hereinafter referred to as the "Company"),
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall not constitute or give rise to a
pecuniary liability or a charge upon its general credit or against its
taxing powers but shall be payable solely out of the Revenues (as
hereinafter defined) derived from this Financing Agreement and the Bonds, as
hereinafter defined):
ARTICLE I
DEFINITIONS
The following terms shall have the meanings specified in this Article
unless the context clearly requires otherwise. The singular shall include
the plural and the masculine shall include the feminine.
"Act" means Sections 35-801 to 35-841, inclusive, of the Arizona
Revised Statutes (formerly Title 9, Chapter 12, Arizona Revised Statutes).
"Act of Bankruptcy" means the filing of a petition in bankruptcy by or
against the Company or the Issuer under the Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary expenses
(including the reasonable value of employee services and fees of Counsel)
incurred by the Issuer in connection with the Bonds, this Agreement, the
Indenture and any transaction or event contemplated by this Agreement or the
Indenture.
"Agreement" means this Financing Agreement by and between the Issuer
and the Company, as from time to time amended and supplemented.
"Alternate Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Alternate Credit Facility
delivered to the Trustee in connection therewith, provided in accordance
with Section 4.5 of this Agreement.
"Authorized Company Representative" means any person who, at the time,
shall have been designated to act on behalf of the Company by a written
certificate furnished to the
<PAGE>
Issuer, the Remarketing Agent and the Trustee containing the specimen
signature of such person and signed on behalf of the Company by any officer
of the Company. Such certificate may designate an alternate or alternates.
"Authorized Issuer Representative" means any person at the time
designated to act on behalf of the Issuer by a written certificate furnished
to the Company and the Trustee containing the specimen signature of such
person and signed on behalf of the Issuer by its President. Such
certificate may designate an alternate or alternates.
"Bank" means Societe Generale, acting through its Los Angeles Branch,
in its capacity as issuer of the Letter of Credit, its successors in such
capacity, and its assigns. If an Alternate Credit Facility in the form of a
letter of credit has been issued and delivered in accordance with Section
4.5 of this Agreement, "Bank" shall mean the Provider of such Alternate
Credit Facility, if in the form of a letter of credit, in its capacity as
issuer of such Alternate Credit Facility, its successors in such capacity,
and its assigns.
"Bank Agent" means Societe Generale, acting through its Los Angeles
Branch, in its capacity as agent for the Bank Group, and its successors in
such capacity; provided, however, if there is no party acting as agent under
the Reimbursement Agreement, "Bank Agent" shall mean the Bank.
"Bank Group" means the banks party to the Reimbursement Agreement,
including the Bank.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978, as amended from time to time, or any substitute or replacement
legislation.
"Bond" or "Bonds" means the Issuer's bonds identified in Section 2.02
of the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as to the tax-
exempt status of interest on the Bonds or other nationally recognized
municipal bond counsel mutually acceptable to the Issuer, the Trustee, the
Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the Indenture.
"Business Day" means a day on which banks located in the city in which
the Principal Office of the Trustee is located and in the city or cities in
which any office at which any action must be instituted or taken in order to
realize upon the Letter of Credit or an Alternate Credit Facility then in
effect is or are located, are not required or authorized to remain closed
and on which the New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended, and regulations promulgated or proposed thereunder.
"Company" means Nevada Power Company, a Nevada corporation, and its
successors and assigns and any surviving, resulting or transferee
corporation as permitted in Section 5.1 hereof.
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<PAGE>
"Counsel" means an attorney at law or a firm of attorneys (who may be
an employee of or counsel to the Issuer or the Company or the Trustee) duly
admitted to the practice of law before the highest court of any state of the
United States of America or of the District of Columbia.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all expenses (including fees and expenses of Counsel)
incurred under the Indenture and the Tax Agreement other than Ordinary
Services and Ordinary Expenses.
"First Mortgage Indenture" means that certain Indenture of Mortgage and
Deed of Trust, dated as of October 1, 1953, from Southern Nevada Power Co.
(now Nevada Power Company) to Bankers Trust Company (successor to First
Interstate Bank of Nevada, N.A., formerly First National Bank of Nevada,
Reno, Nevada), as trustee, as supplemented, modified or amended from time to
time or at any time by supplemental indentures.
"Force Majeure" means acts of God, strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the governments of the United States or of the State, or any of
their departments, agencies or officials, or any civil or military
authority; insurrections; riots; landslides; lightning; earthquakes; fires;
tornadoes; volcanoes; storms; droughts; floods; explosions, breakage, or
malfunction or accident to machinery, transmission lines, pipes or canals,
even if resulting from negligence; civil disturbances; or any other cause
not reasonably within the control of the Company.
"Governing Body" means the Board of County Commissioners of the Issuer.
"Hereof," "herein," "hereunder" and other words of similar import refer
to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this Agreement
between the Issuer and United States Trust Company of New York, as Trustee,
of even date herewith, pursuant to which the Bonds are authorized to be
issued, including any indentures supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy Code.
"Issuer" means Coconino County, Arizona Pollution Control Corporation,
and any successor body to the duties or functions of the Issuer.
"Letter of Credit" means the irrevocable direct-pay Letter of Credit
issued by the Bank to the Trustee, including any extensions thereof,
contemporaneously with the issuance of the Bonds, provided that upon the
issuance and delivery of an Alternate Credit Facility in the form of a
letter of credit in accordance with Section 4.5 of this Agreement, "Letter
of Credit" shall mean such Alternate Credit Facility, if in the form of a
letter of credit, instead of the letter of credit for which such Alternate
Credit Facility has been substituted.
"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its
successors and their assigns, and, if such
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<PAGE>
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer
to any other nationally recognized securities rating agency designated by
the Company and acceptable to the Bank Agent, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered and those expenses including fees and expenses of Counsel,
normally incurred by a trustee or paying agent under instruments similar to
the Indenture and the Tax Agreement.
"Original Purchaser" means Goldman, Sachs & Co., Lehman Brothers, Inc.,
M. R. Beal & Company and Artemis Capital Group, Inc.
"Owner" or "owner of Bonds" means the Person or Persons in whose name
or names a Bond shall be registered on books of the Issuer kept by the
Registrar for that purpose in accordance with the terms of the Indenture.
"Person" means natural persons, firms, partnerships, associations,
corporations, trusts and public bodies.
"Project" means "Project" as defined in the Series 1976 Agreement.
"Project Certificate" means the Company's Project and Refunding
Certificate, delivered concurrently with the issuance of the Bonds, with
respect to certain facts which are within the knowledge of the Company and
certain reasonable assumptions of the Company, to enable Chapman and Cutler,
as Bond Counsel, to determine that interest on the Bonds is not includable
in the gross income of the Owners of the Bonds for federal income taxes
purposes.
"Rebate Fund" means the Rebate Fund, if any, created and established
pursuant to the Tax Agreement and Section 6.16 of the Indenture.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement, dated as of October 1, 1995, among the Company, the Bank Agent,
the Bank and the Bank Group, pursuant to which the initial Letter of Credit
is issued, and any subsequent reimbursement agreement between the Company
and a Bank pursuant to which a subsequent Letter of Credit is issued by the
Bank and delivered to the Trustee, and in each case any and all
modifications, amendments and supplements thereto.
"Remarketing Agent" means the remarketing agent appointed in accordance
with Section 4.11 of the Indenture and any permitted successor thereto.
"Revenues" means the amounts pledged under the Indenture to the payment
of principal of, premium, if any, and interest on the Bonds, consisting of
the following: (i) all amounts payable from time to time by the Company
under Section 4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said amounts payable,
including all moneys drawn by the Trustee under the Letter of Credit to pay
the principal of and premium, if any, and interest on the Bonds and all
amounts realized by the Trustee from any Alternate Credit Facility to pay
the principal of and premium, if any, and
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<PAGE>
interest on the Bonds, all of which amounts are to be deposited in the Bond
Fund, and (ii) any portion of the net proceeds of the Bonds deposited with
the Trustee in the Bond Fund under Section 6.03 of the Indenture.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., a corporation organized and existing under the laws of the State of
New York, its successors and their assigns, and if such division or
corporation shall be dissolved or liquidated or shall no longer perform the
functions of a securities rating agency, "S&P" shall be deemed to refer to
any other nationally recognized securities rating agency designated by the
Company and acceptable to the Bank Agent, with notice to the Trustee.
"Series 1976 Agreement" means the Financing Agreement, dated as of
October 1, 1976, between the Issuer and the Company relating to the Series
1976 Bonds.
"Series 1976 Bonds" means the Issuer's 7-1/8% Collateralized Pollution
Control Revenue Bonds (Nevada Power Company Project) Series 1976, currently
outstanding in the aggregate principal amount of $13,000,000.
"Series 1976 Bond Fund" means the fund established pursuant to Section
5.02 of the Series 1976 Indenture.
"Series 1976 Indenture" means the Indenture of Trust, dated as of
October 1, 1976, between the Issuer and the Series 1976 Trustee, pursuant
to which the Series 1976 Bonds were issued.
"Series 1976 Trustee" means NationsBank of Tennessee (formerly Commence
Union Bank), as trustee under the Series 1976 Indenture.
"State" means the State of Arizona.
"Tax Agreement" means the Tax Exemption Certificate and Agreement with
respect to the Bonds, dated the date of delivery of the Bonds, among the
Company, the Issuer and the Trustee, as from time to time amended and
supplemented.
"Trust Estate" means the property conveyed to the Trustee pursuant to
the Granting Clauses of the Indenture.
"Trustee" means United States Trust Company of New York, as Trustee
under the Indenture, and any successor Trustee appointed pursuant to Section
10.06 or 10.09 of the Indenture at the time serving as Trustee thereunder,
and any separate or co-trustee serving as such thereunder.
All other terms used herein which are defined in the Indenture shall
have the same meanings assigned them in the Indenture unless the context
otherwise requires.
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<PAGE>
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE ISSUER. The Issuer
makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing political
subdivision of the State of Arizona. Under the provisions of the Act,
the Issuer is authorized to enter into the transactions contemplated by
this Agreement, the Indenture and the Tax Agreement and to carry out
its obligations hereunder and thereunder. The Issuer has duly
authorized the execution and delivery of this Agreement, the Indenture
and the Tax Agreement.
(b) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's interests in this
Agreement and the Revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned as security for payment of the
principal of, premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that the issuance
of the Bonds will further the public purposes of the Act.
(d) The Issuer has not assigned and will not assign any of its
interests in this Agreement other than pursuant to the Indenture.
(e) No member of the Governing Body of the Issuer, nor any other
officer of the Issuer, has any interest, financial, employment or
other, in the Company or in the transactions contemplated hereby.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
herein contained:
(a) The Company is a corporation duly incorporated under the laws
of the State and is in good standing in the State, is qualified to do
business as a foreign corporation in all other states and jurisdictions
wherein the nature of the business transacted by the Company or the
nature of the property owned or leased by it makes such licensing or
qualification necessary, has power to enter into and by proper
corporate action has been duly authorized to execute and deliver this
Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the
Tax Agreement, the consummation of the transactions contemplated hereby
and thereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any corporate restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes a
default under any of
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<PAGE>
the foregoing, or results in the creation or imposition of any lien,
charge or encumbrance whatsoever upon any of the property or assets of
the Company under the terms of any instrument or agreement other than
the Indenture.
(c) The statements, information and descriptions contained in the
Project Certificate and the Tax Agreement, as of the date hereof and at
the time of the delivery of the Bonds to the Original Purchaser, are
and will be true, correct and complete, do not and will not contain any
untrue statement or misleading statement of a material fact, and do not
and will not omit to state a material fact required to be stated
therein or necessary to make the statements, information and
descriptions contained therein, in the light of the circumstances under
which they were made, not misleading.
ARTICLE III
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
In order to provide funds to lend to the Company to refund the Series 1976
Bonds as provided in Section 4.1 hereof, the Issuer agrees that it will
issue under the Indenture, sell and cause to be delivered to the Original
Purchaser thereof, its Bonds in the aggregate principal amount of
$13,000,000, bearing interest and maturing as set forth in the Indenture.
The Issuer will thereupon deposit the proceeds received from the sale of the
Bonds as follows: (1) in the Bond Fund, a sum equal to any accrued interest
paid by the Original Purchaser of the Bonds; and (2) $13,000,000 of the
proceeds from the sale of the Bonds in the Prior Bonds Redemption Fund to be
remitted by the Trustee to the Series 1976 Trustee for deposit in the Series
1976 Bond Fund to be used to pay to the owners thereof the principal of the
Series 1976 Bonds upon redemption thereof.
SECTION 3.2. DEPOSIT OF ADDITIONAL FUNDS BY COMPANY; REDEMPTION OF
1976 BONDS. The Company covenants that such additional amounts as may be
required to redeem the Series 1976 Bonds will be deposited with the Series
1976 Trustee pursuant to the Series 1976 Indenture for such purpose. Income
derived from the investment of the proceeds of the Bonds deposited in the
Prior Bonds Redemption Fund will be used to satisfy to that extent the
obligations of the Company specified in this Section 3.2 in connection with
the Series 1976 Bonds. The Company covenants that it will cause the Series
1976 Bonds to be redeemed within 90 days after the issuance and delivery of
the Bonds.
SECTION 3.3. INVESTMENT OF MONEYS IN THE BOND FUND AND THE PRIOR BONDS
REDEMPTION FUND. Except as otherwise herein provided, any moneys held as a
part of the Bond Fund and the Prior Bonds Redemption Fund shall be invested
or reinvested by the Trustee at the written direction, or the oral direction
promptly confirmed in writing, of an Authorized Company Representative as to
specific investments, to the extent permitted by law, in:
(a) bonds or other obligations of the United States of America;
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<PAGE>
(b) bonds or other obligations, the payment of the principal of
and interest on which is unconditionally guaranteed by the United
States of America;
(c) obligations issued or guaranteed as to principal and interest
by any agency or person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(d) obligations issued or guaranteed by any state of the United
States of America, or any political subdivision of any such state, or
in funds consisting of such obligations to the extent described in
Treasury Regulation 1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by commercial
banks;
(h) repurchase agreements fully secured by obligations issued or
guaranteed as to principal and interest by the United States of America
or by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America;
(i) certificates of deposit issued by commercial banks, including
banks domiciled outside of the United States of America; and
(j) units of taxable government money market portfolios composed
of obligations guaranteed as to principal and interest by the United
States of America or repurchase agreements fully collateralized by such
obligations.
The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made and the
interest accruing thereon and any profit realized therefrom shall be
credited to such fund, subject to the provisions of the Tax Agreement. The
Company agrees that to the extent any moneys in the Bond Fund represent
moneys realized under the Letter of Credit or any Alternate Credit Facility
or moneys held for the payment of Bonds pursuant to Sections 6.07 and 6.13
of the Indenture or moneys held for the payment of the purchase price of
Bonds pursuant to Article IV of the Indenture, such moneys shall not be
invested. In addition, the Company agrees that to the extent that any
moneys in the Bond Fund represent moneys to be used to pay the premium
portion of the redemption price of Bonds pursuant to Section 3.01(A)(3) of
the Indenture such moneys shall be invested only in Governmental Obligations
maturing on or before the applicable redemption date or dates.
SECTION 3.4. TAX EXEMPT STATUS OF BONDS. The Company covenants
and agrees that it has not taken or permitted and will not take or permit
any action which results in interest paid on the Bonds being included in
gross income of the holders or beneficial owners of the Bonds for purposes
of federal income taxation (other than a holder or beneficial owner
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who is a "substantial user" of the Project or a "related person" within the
meaning of Section 147(a) of the Code). The Company covenants that none of
the proceeds of the Bonds or the payments to be made under this Agreement,
or any other funds which may be deemed to be proceeds of the Bonds pursuant
to Section 148(a) of the Code, will be invested or used in such a way, and
that no actions will be taken or not taken, as to cause the Bonds to be
treated as "arbitrage Bonds" within the meaning of Section 148(a) of the
Code. Without limiting the generality of the foregoing, the Company
covenants and agrees that it will comply with the provisions of the Tax
Agreement and the Project Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale
of the Bonds in order to refund the Series 1976 Bonds and the Company agrees
to apply the gross proceeds of such loan to the refunding of the Series
1976 Bonds.
(b) The Issuer and the Company expressly reserve the right to enter
into, to the extent permitted by law, an agreement or agreements other than
this Agreement, with respect to the issuance by the Issuer, under an
indenture or indentures other than the Indenture, of obligations to provide
additional funds to refund all or any principal amount of the Bonds.
SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE. (a) On each
date provided in or pursuant to the Indenture for the payment (whether at
maturity or upon redemption or acceleration) of principal of, and premium,
if any, and interest on, the Bonds, until the principal of, and premium, if
any, and interest on, the Bonds shall have been fully paid or provision for
the payment thereof shall have been made in accordance with the Indenture,
the Company shall pay to the Trustee in immediately available funds, for
deposit in the Bond Fund, as a repayment installment of the loan of the
proceeds of the Bonds pursuant to Section 4.1(a) hereof, a sum equal to the
amount payable on such date (whether at maturity or upon redemption or
acceleration) as principal of, and premium, if any, and interest on, the
Bonds as provided in the Indenture; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the Letter of Credit or any Alternate Credit Facility; and
provided further, that the obligation of the Company to make any such
repayment installment shall be reduced by the amount of any moneys then on
deposit in the Bond Fund and available for such payment.
(b) The Company shall pay to the Trustee amounts equal to the amounts
to be paid by the Trustee for the purchase of Bonds pursuant to Article IV
of the Indenture. Such amounts shall be paid by the Company to the Trustee
in immediately available funds on the date such payments pursuant to Section
4.05 of the Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be satisfied and
discharged to the extent of the corresponding payment realized by the
Trustee under the
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Letter of Credit or under any Alternate Credit Facility or to the extent
moneys are available from the source described in clause (i) of Section
4.05(a) of the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees of the
Trustee for the Ordinary Services rendered by it and an amount equal to the
Ordinary Expenses incurred by it under the Indenture and the Tax Agreement,
as and when the same become due, and (ii) the reasonable fees, charges and
expenses of the Trustee for reasonable Extraordinary Services and
Extraordinary Expenses, as and when the same become due, incurred under the
Indenture and the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable for, and
agrees that it will at all times indemnify and hold harmless the Trustee,
its officers, agents, servants and employees against, and pay all expenses
of the Trustee, its officers, agents, servants and employees, relating to
any lawsuit, proceeding or claim and resulting from any action or omission
taken or made by or on behalf of the Trustee, its officers, agents, servants
and employees pursuant to this Agreement, the Indenture or the Tax
Agreement, that may be occasioned by any cause (other than the negligence or
willful misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the Trustee in
respect of which indemnity may be sought against the Company, the Trustee
shall promptly notify the Company in writing and the Company shall be
entitled to assume control of the defense thereof, including the employment
of Counsel and the payment of all expenses. The Trustee shall have the
right to employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall be paid by
the Trustee unless the employment of such Counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any such
action without its consent, but if any such action is settled with the
consent of the Company or if there be final judgment for the plaintiff in
any such action, the Company agrees to indemnify and hold harmless the
Trustee from and against any loss or liability by reason of such settlement
or final judgment. The Company agrees that the indemnification provided
herein shall survive the termination of this Agreement or the Indenture or
the resignation of the Trustee.
(d) The Company agrees to pay all costs incurred in connection with
the issuance of the Bonds from sources other than Bond proceeds and the
Issuer shall have no obligation with respect to such costs.
(e) The Company agrees to indemnify and hold harmless the Issuer and
any member, officer, official or employee of the Issuer against any and all
losses, costs, charges, expenses, judgments and liabilities created by or
arising out of this Agreement, the Indenture or the Tax Agreement or
otherwise incurred in connection with the issuance of the Bonds. The
Company agrees to pay the Issuer its Closing Fee in connection with the
issuance of the Bonds. The Issuer may submit to the Company periodic
statements, not more frequently than monthly, for its Administrative
Expenses and the Company shall make payment to the Issuer of the full amount
of each such statement within 30 days after the Company receives such
statement.
(f) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent, and the Issuer shall
have no obligation or liability with respect to the payment of any such
fees, charges or expenses.
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(g) In the event the Company shall fail to make any of the payments
required by (a) or (b) of this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid and the Company will pay interest to the extent
permitted by law, on any overdue amount at the rate of interest borne by the
Bonds on the date on which such amount became due and payable until paid.
In the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment so in
default shall continue as an obligation of the Company until the amount in
default shall have been fully paid, and the Company agrees to pay the same
with interest thereon to the extent permitted by law at a rate 1% above the
rate of interest then charged by the Trustee on 90-day commercial loans to
its prime commercial borrowers until paid.
(h) To the extent that the Letter of Credit is in effect and moneys on
deposit in the Bond Fund constitute Available Moneys or have been deposited
in separate, segregated accounts in the Bond Fund for the purpose of
becoming Available Moneys, such moneys shall not be available for transfer
and shall not be transferred from the Bond Fund to the Rebate Fund to
satisfy the requirements of the Tax Agreement (unless the Company fails to
pay the amounts described below). In the event that moneys are not
available for transfer from the Bond Fund to the Rebate Fund as required by
the Tax Agreement, the Company agrees to pay any such amount required to be
so transferred and not available for such purpose in the Bond Fund by paying
such amount to the Trustee for deposit directly into the Rebate Fund. The
obligation of the Company set forth in this Section 4.2(h) shall survive the
termination of this Agreement.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments pursuant to this Agreement shall be absolute and
unconditional without defense or set-off by reason of any default by the
Issuer under this Agreement or under any other agreement between the Company
and the Issuer or for any other reason, it being the intention of the
parties that the payments required hereunder will be paid in full when due
without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is understood and
agreed that all payments required to be made by the Company pursuant to
Section 4.2 hereof (except payments made to the Trustee pursuant to Section
4.2(c) hereof, to the Remarketing Agent pursuant to Section 4.2(f) hereof,
to the Issuer pursuant to Section 4.2(e) hereof and to any or all the Issuer
and the Trustee and the Remarketing Agent pursuant to Section 4.2(g) hereof)
and certain rights of the Issuer hereunder are pledged and assigned by the
Indenture. The Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to pay or cause to
be paid to the Trustee all said amounts except payments to be made to the
Remarketing Agent pursuant to Section 4.2(f) hereof and payments to be made
to the Issuer pursuant to Sections 4.2(e) and (g) hereof. The Project will
not constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND ALTERNATE CREDIT FACILITY. (a) The
Company shall arrange for a Letter of Credit or an Alternate Credit Facility
to be in effect at all times with such terms and conditions as required
under Sections 6.14 and 6.15 of the Indenture. Such Letter of Credit or
Alternate Credit Facility must be delivered to the Trustee
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by the Company not later than 10:30 a.m., New York time, on the fifth
Business Day preceding the date the then existing Letter of Credit or
Alternate Credit Facility is to expire by its terms.
(b) At any time the Company may, at its option, provide for the
delivery to the Trustee of an Alternate Credit Facility. The Alternate
Credit Facility (a) may consist, at the option of the Company, of (i) first
mortgage bonds of the Company, (ii) a letter of credit, or (iii) such other
security or credit support as the Company may elect to furnish and which is
acceptable to the Issuer, in each case in an amount and having terms
sufficient to support the payment of the principal of and interest on all
Bonds then outstanding and, at the election of the Company, any of its other
obligations under this Agreement, (b) shall have administrative provisions
satisfactory to the Trustee, and (c) shall be for a stated term and shall
not be terminable prior to the end of such term except by action of the
Trustee at the direction of the Company upon the fulfillment of any
requirements of such Alternate Credit Facility and compliance with the
conditions set forth in Section 4.5(c) hereof. The Company shall have an
option, at any time, and from time to time, upon notice given as provided in
Section 4.5(c) hereof, to provide an Alternate Credit Facility in
substitution for the Letter of Credit or another Alternate Credit Facility,
but only in accordance with the provisions of this Section 4.5(b) and
Section 4.5(c) hereof.
(c) As a condition to the exercise by the Company of its option set
forth in Section 4.5(b) hereof to deliver an Alternate Credit Facility, the
Company shall provide to the Issuer, the Trustee and the Remarketing Agent,
at least 20 days prior to the fifth Business Day next preceding the
effective date of such change, a notice specifying (i) that the Letter of
Credit or the Alternate Credit Facility then in effect will be changed, (ii)
the effective date of such change (which must be at least five Business Days
prior to the date the then existing Letter of Credit or Alternate Credit
Facility is to expire by its terms), (iii) the form and substance of the
Letter of Credit or the Alternate Credit Facility then in effect, and (iv)
the form and substance of the Alternate Credit Facility to be in effect on
the date specified in (ii) above. Such notice to the Trustee must be
accompanied by the opinion of Bond Counsel required by Sections 6.14 and
6.15 of the Indenture and (i) a letter from Moody's, if the Bonds should
then be rated by Moody's, and from S&P, if the Bonds should then be rated by
S&P, to the effect that the substitution of the proposed Alternate Credit
Facility for the Letter of Credit or the Alternate Credit Facility then in
effect will not by itself result in a reduction, suspension or withdrawal of
its ratings of the Bonds which then prevail (except that such rating
evidence shall not be required if the Bonds are subject to a mandatory
tender for purchase pursuant to Section 4.02(a)(iii) of the Indenture), and
(ii) the form of the substitute Alternate Credit Facility to be in place on
the effective date of such change, together with any documentation and
opinions referred to by Moody's or S&P in any such letter.
(d) The Issuer and the Company agree that the Issuer will in the
Indenture authorize and direct the Trustee to accept and agree to conditions
and provisions of the Letter of Credit and any Alternate Credit Facility
which may be provided in accordance with the provisions of this Section 4.5.
SECTION 4.6. PAYMENT OF THE BONDS AND OTHER AMOUNTS. The Bonds and
interest and premium, if any, thereon shall be payable solely from (i)
payments made by the
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Company to the Trustee under Section 4.2(a) hereof, (ii) amounts realized
under the Letter of Credit or any Alternate Credit Facility and (iii) other
moneys on deposit in the Bond Fund and available therefor.
Payments of principal of, and premium, if any, or interest on, the
Bonds with moneys in the Bond Fund constituting proceeds from the sale of
the Bonds or earnings on investments made under the provisions of the
Indenture shall be credited against the obligation to pay required by
Section 4.2(a) hereof, and the obligation to pay required by Section 4.2(a)
hereof shall be deemed to be satisfied and discharged to the extent of the
corresponding payment made to the Trustee under the Letter of Credit or any
Alternate Credit Facility.
Whenever any Bonds are redeemable in whole or in part at the option of
the Company, the Trustee, on behalf of the Issuer, shall redeem the same
upon the request of the Company and such redemption (unless conditional)
shall be made from payments made by the Company to the Trustee under Section
4.2(a) hereof and amounts realized under the Letter of Credit or any
Alternate Credit Facility equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in respect of the
principal of, or premium, if any, or interest on, all or any portion of the
Bonds in accordance with the Indenture (whether at maturity or upon
redemption or acceleration or upon provision for payment in accordance with
Article VIII of the Indenture), payments shall be deemed paid to the extent
such payment or provision therefor has been made and is considered to be a
payment of principal of, or premium, if any, or interest on, such Bonds. If
such Bonds are thereby deemed paid in full, the Trustee shall notify the
Company and the Issuer that such payment requirement has been satisfied.
Subject to the foregoing, or unless the Company is entitled to a credit
under this Agreement or the Indenture, all payments shall be in the full
amount required by Section 4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Company agrees that during the term
of this Agreement, it will maintain its corporate existence and its good
standing in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation unless (a) The acquirer of its assets or the corporation
with which it shall consolidate or into which it shall merge shall (i) be a
corporation organized under the laws of one of the states of the United
States of America, (ii) be qualified to do business in the State, (iii) be a
public utility, and (iv) assume in writing all of the obligations of the
Company under this Agreement and the Tax Agreement.
Any transfer of all or substantially all of the Company's assets to any
of its wholly owned subsidiaries shall not be deemed to constitute a
"disposition of all or substantially all of the Company's assets" within the
meaning of the preceding paragraph. Any such transfer of
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the Company's assets shall not relieve the Company of any of its obligations
under this Agreement.
SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have an annual
audit made by its regular independent certified public accountants and to
furnish the Trustee (within 30 days after receipt by the Company) with a
balance sheet and statement of income and surplus showing the financial
condition of the Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Company and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
a report of said accountants that such statements have been prepared in
accordance with generally accepted accounting principles. The Company's
obligations under this Section 5.2 may be satisfied by delivering a copy of
the Company's Annual Report to the Trustee at the same time that it is
mailed to stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; ETC. The
Company shall maintain or cause to be maintained the Project in good repair
and keep it properly insured and shall promptly pay or cause to be paid all
costs thereof. The Company shall promptly pay or cause to be paid all
installments of taxes, installments of special assessments, and all
governmental, utility and other charges with respect to the Project, when
due. The Company may, at its own expense and in its own name in good faith
contest or appeal any such taxes, assessments or other charges, or
installments thereof, but shall not permit any such taxes, assessments or
other charges, or installments thereof, to remain unpaid if such nonpayment
shall subject the Project or any part thereof to loss or forfeiture.
SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS. The Company shall
cause such security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to time to be
kept, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve, protect and perfect the security
of the Owners of the Bonds and the rights of the Trustee and, after payment
in full of the Bonds as provided in the Indenture, the rights of the Bank
Group provided in the Indenture, and to perfect the security interest
created by the Indenture. The Company agrees to abide by the provisions of
Section 5.04 of the Indenture to the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no warranty,
either express or implied, as to the Project or that it will be suitable for
the purposes of the Company or needs of the Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT. The
Issuer and the Company agree that title to the Project shall be in and
remain in the Company, and that the Project shall be the sole property of
the Company in which the Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby granted the option to designate from time to
time changes in Rate Periods (and to rescind such changes) in the manner and
to the extent set forth in Section 2.03 of the Indenture. In the event the
Company elects to exercise any such option,
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the Company agrees that it shall cause notices of adjustments of Rate
Periods (or rescissions thereof) to be given to the Issuer, the Trustee and
the Remarketing Agent in accordance with Section 2.03(a), (b), (c), (d) or
(f) of the Indenture.
SECTION 5.8. INFORMATION REPORTING, ETC.. The Issuer covenants and
agrees that, upon the direction of the Company or Bond Counsel, it will mail
or cause to be mailed to the Secretary of the Treasury (or his designee as
prescribed by regulation, currently the Internal Revenue Service Center,
Philadelphia, PA 19255) a statement setting forth the information required
by Section 149(e) of the Code, which statement shall be in the form of the
Information Return for Tax-Exempt Private Activity Bond Issues (Form 8038)
of the Internal Revenue Service (or any successor form) and which shall be
completed by the Company and Bond Counsel based in part upon information
supplied by the Company and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or liability
of the Issuer created by or arising out of this Agreement or otherwise
incurred in connection with the issuance of the Bonds (including without
limitation any liability created by or arising out of the representations,
warranties or covenants set forth herein or otherwise) shall not impose a
debt or pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or a charge upon the general credit or taxing powers of
any of the foregoing, but shall be payable solely out of the Revenues or
other amounts payable by the Company to the Issuer hereunder or otherwise
(including without limitation any amounts derived from indemnifications
given by the Company).
Neither the issuance of the Bonds nor the delivery of this Agreement
shall, directly or indirectly or contingently, obligate the Issuer or the
State or any political subdivision thereof to levy any form of taxation
therefor or to make any appropriation for their payment. Nothing in the
Bonds or in the Indenture or this Agreement or the proceedings of the Issuer
authorizing the Bonds or in the Act or in any other related document shall
be construed to authorize the Issuer to create a debt of the Issuer or the
State or any political subdivision thereof within the meaning of any
constitutional or statutory provision of the State. The principal of, and
premium, if any, and interest on, the Bonds shall be payable solely from the
funds pledged for their payment in accordance with the Indenture and
available therefor under this Agreement, the Letter of Credit and any
Alternate Credit Facility. Neither the State nor any political subdivision
thereof shall in any event be liable for the payment of the principal of,
premium, if any, or interest on, the Bonds or for the performance of any
pledge, obligation or agreement of any kind whatsoever which may be
undertaken by the Issuer. No breach of any such pledge, obligation or
agreement may impose any pecuniary liability upon the Issuer or the State or
any political subdivision thereof, or any charge upon the general credit or
against the taxing power of the Issuer or the State or any political
subdivision thereof.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that the
Issuer and the Trustee and their duly authorized representatives shall have
the right at all reasonable times to enter upon and examine and inspect the
Project property and shall also be permitted, at all reasonable times, to
examine the books and records of the Company insofar as they relate to the
Project.
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SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while the Letter of Credit is in effect, the
Company shall not and shall not allow any Insider of the Company to purchase
any Bonds except (a) with Available Moneys or (b) as provided in Section
4.2(b) hereof. At any time while the Letter of Credit is in effect, the
Issuer shall not and shall not allow any Insider of the Issuer to purchase
any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Agreement and the terms "event of default" or
"default" shall mean, whenever they are used in this Agreement, any one or
more of the following events:
(a) Failure by the Company to pay when due any amounts required
to be paid under Section 4.2(a) hereof, which failure results in an
event of default under subparagraph (a) or (b) of Section 9.01 of the
Indenture; or
(b) Failure by the Company to pay or cause to be paid any payment
required to be paid under Section 4.2(b) hereof, which failure results
in an event of default under subparagraph (c) of Section 9.01 of the
Indenture; or
(c) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in
Section 4.5(a) of this Agreement, including without limitation failure
by the Company to provide the Trustee with a Letter of Credit or
Alternate Credit Facility on or before 10:30 a.m., New York time, on
the fifth Business Day preceding the date the then existing Letter of
Credit or Alternate Credit Facility is to expire; or
(d) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) and (c) above, for a
period of 90 days after written notice, or in the case of failure by
the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed in Section 4.2(h)
hereof, for a period of 30 days after written notice, specifying such
failure and requesting that it be remedied and stating that such notice
is a "Notice of default" hereunder, given to the Company by the Trustee
or to the Company and the Trustee by the Issuer, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior
to its expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the Issuer and
the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted within the
applicable period and diligently pursued until the failure is corrected
and such corrective action or diligent pursuit is evidenced to the
Trustee by a certificate of an Authorized Company Representative; or
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(e) A proceeding or case shall be commenced, without the
application or consent of the Company, in any court of competent
jurisdiction seeking (i) liquidation, reorganization, dissolution,
winding-up or composition or adjustment of debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the
Company or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and
such proceeding or cause shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered against the
Company in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect) or other applicable law; or
(f) The Company shall admit in writing its inability to pay its
debts generally as they become due or shall file a petition in
voluntary bankruptcy or shall make any general assignment for the
benefit of its creditors, or shall consent to the appointment of a
receiver or trustee of all or substantially all of its property, or
shall commence a voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of competent
jurisdiction a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, or shall fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under such Bankruptcy Code or
other applicable law; or
(g) Dissolution or liquidation of the Company; provided that the
term "dissolution or liquidation of the Company" shall not be construed
to include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.1 hereof; or
(h) The occurrence of an "event of default" under the Indenture.
The foregoing provisions of Section 6.1(d) are subject to the following
limitations: If by reason of Force Majeure the Company is unable in whole
or in part to carry out its agreements on its part herein contained, other
than the obligations on the part of the Company contained in Article IV and
Sections 5.3 and 6.4 hereof, the Company shall not be deemed in default
during the continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within
the discretion of the Company and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when such course is
in the sole judgment of the Company unfavorable to the Company.
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SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of default
referred to in Section 6.1 hereof shall have happened and be continuing, the
Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company, declare the
unpaid indebtedness under Section 4.2(a) hereof to be due and payable
immediately, if concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and
payable, and upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in the Bond
Fund, to pay the unpaid principal of, premium, if any, and interest
accrued on, the Bonds) shall become and shall be immediately due and
payable as liquidated damages; and
(b) may take whatever action at law or in equity as may appear
necessary or desirable to collect the payments and other amounts then
due and thereafter to become due hereunder or to enforce performance
and observance of any obligation, agreement or covenant of the Company
under this Agreement.
Any amounts collected pursuant to action taken under this Section 6.2
shall be paid into the Bond Fund (unless otherwise provided in this
Agreement) and applied in accordance with the provisions of the Indenture.
No action taken pursuant to this Section 6.2 shall relieve the Company from
the Company's obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this Agreement against
any officer, director or stockholder, past, present or future, of the
Company as such, either directly or through the Company, under any
constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the Issuer from
enforcing directly any of its rights under Sections 4.2(e), 4.2(g), 5.3 and
6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Issuer or the Trustee
to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein
expressly required. Subject to the provisions of the Indenture and hereof,
such rights and remedies as are given the Issuer hereunder shall also extend
to the Trustee. The Owners of the Bonds, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ Counsel or incur other
expenses for the collection of the
-18-
<PAGE>
indebtedness hereunder or the enforcement of performance or observance of
any obligation or agreement on the part of the Company herein contained, the
Company agrees that it will on demand therefor pay to the Trustee, the
Issuer or, if so directed by the Issuer, to the Counsel for the Issuer, the
reasonable fees of such Counsel and such other expenses so incurred by or on
behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. No waiver shall be effective
unless in writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company without
both the consent of the Trustee and the Bank to such waiver. The Trustee
and the Bank shall have the power to waive any default by the Company
hereunder, except a default under Section 3.4, 4.2(e), 4.2(g), 5.3 or 6.4
hereof, in so far as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if, after the
acceleration of the maturity of the outstanding Bonds by the Trustee
pursuant to Section 9.02 of the Indenture, (i) all arrears of principal of
and interest on the outstanding Bonds and interest on overdue principal and
(to the extent permitted by law) on overdue installments of interest at the
rate of interest borne by the Bonds on the date on which such principal or
interest became due and payable and the premium, if any, on all Bonds then
Outstanding which have become due and payable otherwise than by
acceleration, and all other sums payable under the Indenture, except the
principal of and the interest on such Bonds which by such acceleration shall
have become due and payable, shall have been paid, (ii) all other things
shall have been performed in respect of which there was a default, (iii)
there shall have been paid the reasonable fees and expenses of the Trustee
and of the Owners of such Bonds, including reasonable attorneys' fees paid
or incurred and (iv) such event of default under the Indenture shall be
waived in accordance with Section 9.09 of the Indenture with the consequence
that such acceleration under Section 9.02 of the Indenture is rescinded,
then the Company's default hereunder shall be deemed to have been waived and
its consequences rescinded and no further action or consent by the Trustee
or the Issuer or the Bank shall be required; provided that there has been
furnished an opinion of Bond Counsel to the effect that such waiver will not
adversely affect the exemption from federal income taxes of interest on the
Bonds.
ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and is hereby
granted, the option to prepay the payments due hereunder in whole or in part
at any time or from time to time (a) to provide for the redemption of Bonds
pursuant to the provisions of Section 3.01(A) of the Indenture or (b) to
provide for the defeasance of the Bonds pursuant to Article VIII of the
Indenture. In the event the Company elects to provide for the redemption of
Bonds as permitted by this Section, the Company shall notify and instruct
the Trustee in accordance with Section 7.3 hereof to redeem all or any
portion of the Bonds in
-19-
<PAGE>
advance of maturity. If the Company so elects, any redemption of Bonds
pursuant to Section 3.01(A) of the Indenture may be made conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and agrees
that if all or any part of the Bonds are unconditionally called for
redemption in accordance with the Indenture or become subject to mandatory
redemption, it will prepay the indebtedness hereunder in whole or in part,
prior to the date on which notice of such redemption is given to the owners
of such Bonds, in an amount sufficient to redeem such Bonds on the date
fixed for the redemption of the Bonds.
SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of the option
granted to the Company in Section 7.1 hereof, or upon the Company having
knowledge of the occurrence of any event requiring mandatory redemption of
the Bonds in accordance with Section 3.01(B) of the Indenture, the Company
shall give written notice to the Issuer, the Bank, the Remarketing Agent and
the Trustee. The notice shall provide for the date of the application of
the prepayment made by the Company hereunder to the retirement of the
Bonds in whole or in part pursuant to call for redemption and shall be given
by the Company not less than 35 days prior to the date of the redemption
which is to occur as a result of such prepayment (or such later date as is
acceptable to the Trustee and the Issuer), and in the case of a redemption
of Bonds pursuant to Section 3.01(B) of the Indenture shall be given on a
date which will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for redemption of
the Bonds or portions thereof, there shall be deposited with the Trustee
from drawings upon the Letter of Credit or payments by the Company or from
amounts realized under any Alternate Credit Facility as required by Section
7.1 or 7.2, as appropriate, for payment into the Bond Fund. Any other
provision of this Agreement or the Indenture to the contrary
notwithstanding, any prepayment of moneys hereunder shall be made in such
manner and at such time that any redemption of Bonds or portions thereof
will be made with Available Moneys.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise provided herein, all
notices, certificates or other communications hereunder shall be
sufficiently given if in writing and shall be deemed given when mailed by
first class mail, postage prepaid, or by qualified overnight courier
service, courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: if to the Issuer, at P.O. Box
10, Flagstaff, Arizona 86002 or at 222 East Birch Avenue, Flagstaff, Arizona
86001, or to telecopy number (602) 773-1312, Attention President; if to the
Company, at P.O. Box 230, 6226 West Sahara Avenue, Las Vegas, Nevada 89151,
or to telecopy number (702) 367-5629, Attention: Treasurer; if to the
Trustee, at 114 West 47th Street, New York, New York 10036-1532 or to
telecopy number (212) 852-1625 Attention: Corporate Trust Administration;
if to the Remarketing Agent, at 85 Broad Street, 24th Floor, New York, New
York 10004, Attention: Municipal Money Markets Desk, or to telecopy number
(212) 346-4209; and if to the Bank or the Bank Agent, at 2029 Century Park
East, Suite 2900, Los Angeles, California 90067,
-20-
<PAGE>
Attention: Minerva Arvisu, or to telecopy number (310) 203-0539. In case
by reason of the suspension of regular mail service, it shall be
impracticable to give notice by first class mail of any event to the Issuer,
to the Company, to the Remarketing Agent, to the Bank or to the Bank Agent
when such notice is required to be given pursuant to any provisions of this
Agreement, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be sufficient giving of such notice. The
Issuer, the Company, the Trustee, the Remarketing Agent, the Bank and the
Bank Agent may, by notice pursuant to this Section 8.1, designate any
different addresses to which subsequent notices, certificates or other
communications shall be sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by
either party without consent of the other and the Bank or the Bank Agent,
except that the Issuer shall assign to the Trustee its rights under this
Agreement (except under Sections 4.2(e), 4.2(g), 5.3, and 6.4 hereof) as
provided by Section 4.4 hereof, and the Company may assign its rights under
this Agreement to any transferee or any surviving or resulting corporation
as provided by Section 5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this Agreement shall
be held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties hereto that after payment in full of (i) the Bonds (or provision
for payment thereof having been made in accordance with the provisions of
the Indenture), (ii) the fees, charges and expenses of the Trustee in
accordance with the Indenture, (iii) the Administrative Expenses, (iv) the
fees and expenses of the Remarketing Agent and the Issuer and (v) all other
amounts required to be paid under this Agreement and the Indenture, any
amounts remaining in the Bond Fund shall belong to and be paid to the
Company by the Trustee; provided, however, that if there remain
reimbursement or other obligations of the Company under the Reimbursement
Agreement, such moneys remaining in the Bond Fund shall, subject to Section
13.10(b) of the Indenture, be paid by the Trustee to the Bank Agent upon
written direction of the Bank Agent to such extent.
SECTION 8.6. AMENDMENTS, CHANGES, AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument executed by the Issuer and the Company, and only if the written
consent of the Trustee and the Bank thereto is obtained. Subject to the
written consent of the Trustee and the Bank, the Issuer and the Company
agree to enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this Agreement or the
Indenture, (ii) for the purpose of curing any ambiguity, formal defect or
omission in this Agreement, (iii) so as to add additional rights acquired
in accordance with the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or any of
them,
-21-
<PAGE>
or (v) in connection with any other change herein which is not to the
prejudice of the Trustee, the Bank or the Owners of the Bonds; provided,
however, that the Issuer shall not thereby incur any monetary obligation or
liability (except only to the extent that the same shall be payable solely
and only out of funds provided or to be provided by the Company) or
surrender or abdicate in whole or in part any of its essential governmental
functions or powers or any of its discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the
Company is required to take some action at the request of the other, such
approval of such request shall be given for the Issuer by the Authorized
Issuer Representative and for the Company by the Authorized Company
Representative, and the other party hereto and the Trustee shall be
authorized to act on any such approval or request and neither party hereto
shall have any complaint against the other or against the Trustee as a
result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from its date to and including such date as all of the
Bonds issued under the Indenture shall have been fully paid or retired (or
provision for such payment shall have been made as provided in the
Indenture), provided that all representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds and
the covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e), 4.2(f),
4.2(g) and 4.2(h) hereof shall survive the termination of this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At the
acceleration, termination or expiration of the term of this Agreement and
following full payment of the Bonds or provision for payment thereof and of
all other fees and charges having been made in accordance with the
provisions of this Agreement and the Indenture, the Issuer shall deliver to
the Company any documents and take or cause the Trustee to take such actions
as may be necessary to effectuate the cancellation and evidence the
termination of this Agreement.
SECTION 8.11. REFERENCES TO BANK AND PROVIDER. At any time that the
Letter of Credit (and if at such time there shall be no Pledged Bonds) or
any Alternate Credit Facility is not in effect and the Bank Group shall have
been paid all amounts owed them under the Reimbursement Agreement (as
evidenced by a written certificate of the Bank Agent delivered to the
Trustee to such effect), all references herein to the Bank or the Bank Agent
or the Bank Group or the Provider, as the case may be, shall be deemed
ineffective. Any provisions hereof requiring the consent of the Bank or the
Bank Agent or the Bank Group or the Provider shall be deemed ineffective if
the Bank or the Provider is at any such time in default in its obligations
under the Letter of Credit or the Alternate Credit Facility, as the case may
be, to fund a drawing thereunder made in strict compliance with the terms of
such Letter of Credit or Alternate Credit Facility.
SECTION 8.12. NOTICE REGARDING CANCELLATION OF CONTRACTS. As required
by the provisions of Section 38-511, Arizona Revised Statutes, as amended,
notice is hereby given
-22-
<PAGE>
that political subdivisions of the State of Arizona or any of their
departments or agencies may, within three (3) years of its execution, cancel
any contract, without penalty or further obligation, made by the political
subdivisions or any of their departments or agencies on or after September
30, 1988, if any person significantly involved in initiating, negotiating,
securing, drafting or creating the contract on behalf of the political
subdivisions or any of their departments or agencies is at any time while
the contract or any extension of the contract is in effect, an employee or
agent of any other part to the contract in any capacity or a consultant to
any other party of the contract with respect to the subject matter of the
contract. The cancellation shall be effective when written notice from the
chief executive officer or governing body of the political subdivision is
received by all other parties to the contract unless the notice specifies a
later time.
The Company covenants and agrees not to employ as an employee, agent
or, with respect to the subject matter of this Agreement, a consultant, any
person significantly involved in initiating, negotiating, securing, drafting
or creating this Agreement on behalf of the Issuer within three (3) years
from the execution hereof, unless a waiver is provided by the Issuer.
-23-
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
COCONINO COUNTY, ARIZONA POLLUTION
CONTROL CORPORATION
By
--------------------------------------
President
Board of Directors
(SEAL)
Attest:
- --------------------------------
Secretary
NEVADA POWER COMPANY
By STEVEN W. RIGAZIO
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
RICHARD L. HINCKLEY
- --------------------------------
Secretary
-24-
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
COCONINO COUNTY, ARIZONA POLLUTION
CONTROL CORPORATION
By BRUCE J. NORDSTROM
--------------------------------------
President
Board of Directors
(SEAL)
Attest:
TERRANCE RICE
- --------------------------------
Secretary
NEVADA POWER COMPANY
By
--------------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
- --------------------------------
Secretary
-24-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF NEVADA POWER COMPANY AS OF DECEMBER 31, 1995, AND THE
RELATED STATEMENTS OF INCOME, CASH FLOWS, AND RETAINED EARNINGS FOR THE
YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $1,701,120
<OTHER-PROPERTY-AND-INVEST> 9,989
<TOTAL-CURRENT-ASSETS> 124,917
<TOTAL-DEFERRED-CHARGES> 211,585
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,047,611
<COMMON> 50,243
<CAPITAL-SURPLUS-PAID-IN> 595,258
<RETAINED-EARNINGS> 118,860
<TOTAL-COMMON-STOCKHOLDERS-EQ> 764,361
38,000
3,863
<LONG-TERM-DEBT-NET> 703,775
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 300
200
<CAPITAL-LEASE-OBLIGATIONS> 96,224
<LEASES-CURRENT> 5,309
<OTHER-ITEMS-CAPITAL-AND-LIAB> 435,579
<TOT-CAPITALIZATION-AND-LIAB> 2,047,611
<GROSS-OPERATING-REVENUE> 749,981
<INCOME-TAX-EXPENSE> 34,372
<OTHER-OPERATING-EXPENSES> 598,051
<TOTAL-OPERATING-EXPENSES> 632,423
<OPERATING-INCOME-LOSS> 117,558
<OTHER-INCOME-NET> 6,349
<INCOME-BEFORE-INTEREST-EXPEN> 123,907
<TOTAL-INTEREST-EXPENSE> 46,936
<NET-INCOME> 76,971
3,966
<EARNINGS-AVAILABLE-FOR-COMM> 73,005
<COMMON-STOCK-DIVIDENDS> 73,745
<TOTAL-INTEREST-ON-BONDS> 47,745
<CASH-FLOW-OPERATIONS> 185,919
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 0<F1>
<FN>
<F1>INAPPLICABLE.
</FN>
<PAGE>
<PAGE>
</TABLE>
<PAGE>
==============================================================================
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
dated as of October 1, 1995
among
NEVADA POWER COMPANY,
THE BANKS NAMED HEREIN
and
SOCIETE GENERALE, LOS ANGELES BRANCH,
as Administrative Agent and Letter of Credit Bank
==============================================================================
<PAGE>
<PAGE>
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.............................11
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....................12
SECTION 2.05. Advances and Interest......................12
SECTION 2.06. Prepayments................................13
SECTION 2.07. Increased Costs............................14
SECTION 2.08. Increased Capital..........................15
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...........................16
SECTION 2.13. Obligations Absolute.......................16
SECTION 2.14. Taxes......................................17
SECTION 2.15. Additional Interest.........................18
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..........................20
SECTION 3.02. Additional Conditions Precedent to
Issuance of the Letters of Credit..........21
SECTION 3.03. Conditions Precedent to Each Advance.......22
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Company....................................23
ARTICLE V COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants......................26
<PAGE>
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
----
SECTION 5.02. Negative Covenants.........................30
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default..........................32
SECTION 6.02. Upon an Event of Default...................34
ARTICLE VII MISCELLANEOUS
SECTION 7.01. Amendments, Etc............................35
SECTION 7.02. Notices, Etc...............................35
SECTION 7.03. No Waiver: Remedies........................36
SECTION 7.04. Right of Set-off...........................36
SECTION 7.05. Indemnification............................37
SECTION 7.06. Banks Not Liable...........................37
SECTION 7.07. Costs, Expenses and Taxes..................38
SECTION 7.08. Binding Effect.............................39
SECTION 7.09. Severability...............................39
SECTION 7.10. Governing Law; Submission to Jurisdiction;
Etc. ......................................39
SECTION 7.11. Headings...................................40
SECTION 7.12. Counterparts...............................40
SECTION 7.13. Waiver of Jury Trial.......................40
SECTION 7.14. Participation and Assignment...............40
ARTICLE VIII SYNDICATION..................................41
SECTION 8.01. Syndication................................41
SECTION 8.02. Sharing of Payments........................42
ARTICLE IX THE ADMINISTRATIVE AGENT AND THE LC BANK......42
SECTION 9.01. Authorization and Action...................42
SECTION 9.02. Administrative Agent's Reliance, Etc........43
SECTION 9.03. Bank Credit Decision.......................43
SECTION 9.04. Indemnification............................44
SECTION 9.05. Barclays and Affiliates....................44
SECTION 9.06. Successor Administrative Agent.............44
EXHIBIT A Form of Irrevocable Letter of Credit with
Exhibits 1 through 5 thereto
EXHIBIT B Form of Custodian Agreement
-ii-
<PAGE>
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
----
EXHIBIT C Form of Opinion of General Counsel of the Company
EXHIBIT D Form of Opinion of Special Counsel to the Company
-iii-
<PAGE>
<PAGE>
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of October
1, 1995, among NEVADA POWER COMPANY, a Nevada corporation (the "Company"),
SOCIETE GENERALE, LOS ANGELES BRANCH, as Administrative Agent and Letter of
Credit Bank, and the Banks (as defined herein).
PRELIMINARY STATEMENTS. (1) Clark County, Nevada and Coconino
County, Arizona Pollution Control Corporation (collectively, the "Issuer")
have issued various refunding bonds for the purpose of refunding certain
tax-exempt bonds issued for the benefit of the Company.
(2) The Company has requested that the Letter of Credit Bank
issue three 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 $120,711,377 (the "Total Commitment"), of which (i)
$118,300,000 shall support the payment of principal of the Series B Bonds,
the Series D Bonds and the Series E Bonds (as defined herein) or the portion
of the purchase price of such Bonds corresponding to principal (the
"Principal Component"), and (ii) $2,411,377 shall support the payment of up
to 62 days' interest on the principal amount of the Series B Bonds, the
Series D Bonds and the Series E 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,
---------------------
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):
"Additional Interest Margin" means the following percentages per
--------------------------
annum: (i) .07% for any period that Level I, II, or III Status exists; (ii)
.10% for any period that Level IV Status exists; and (iii) .125% for any
period that Level V Status exists.
"Advance" has the meaning provided in Section 2.05 (a).
--------
"Administrative Agent" means Societe Generale, acting in its capacity
--------------------
as Administrative Agent for the Banks hereunder, and any successor
Administrative Agent.
<PAGE>
<PAGE> 2
"Affiliate" means any trade or business (whether or not
---------
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
----------------------------
in effect plus the applicable Additional Interest Margin.
"Applicable L/C Rate" shall mean the following percentages: (i)
-------------------
.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
--------------------------
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.
"Base Rate" means a fluctuating interest rate per annum equal at
---------
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
-----------------
Rate.
"Bond Purchase Agreement" means the Bond Purchase Agreement
-------------------------
executed with respect to each Series of Bonds.
"Bonds" means, collectively, the Series B Bonds, the Series D
-----
Bonds and the Series E Bonds.
"Business Day" means a day of the year on which banks are not
------------
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
-----------------
Letter of Credit.
"Code" means the Internal Revenue Code of 1986, as amended from
----
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
----------
Preliminary Statement hereto.
<PAGE>
<PAGE> 3
"Commitment Termination Date" has the meaning assigned to that
---------------------------
term in Section 2.01.
"Common Equity" means the common stockholders' equity of the
-------------
Company, less the book value of all intangible assets of the Company.
"Common Stock" means the $1.00 par value common stock of the
------------
Company.
"Custodian Agreement" means the Custodian Agreement in
-------------------
substantially the form of Exhibit B hereto.
"Date of Issuance" has the meaning assigned to that term in
----------------
Section 2.02.
"Debt" or "Indebtedness" means (i) indebtedness for borrowed money
---- ------------
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
------------
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
- --------
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
-----------------
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,
-------------------
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
------------------
matters, including, without limitation, those relating to fines, orders,
injunctions, penalties, damages,
<PAGE>
<PAGE> 4
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 Material Transportation Act
-- ---
(49 U.S.C. Subsection 1801 et seq.), the Resource Conservation and Recovery Act
-- ---
(42 U.S.C. Subsection 6901 et seq.), the Federal Water Pollution Control Act
-- ---
(33 U.S.C. Subsection 1251 et seq.), the Clean Air Act (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 Right to Know Act (42 U.S.C.
- ---
Subsection 11001 et seq.), each as amended or 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.
-----
"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
---------------
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 to the Administrative Agent by 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
-----------------------
Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" means for any Interest Period
----------------------------------
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
----------------
Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
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
<PAGE>
<PAGE> 5
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.
"Fee Letter" means that certain letter agreement dated the Date of
----------
Issuance executed by the Company and addressed to the Administrative Agent
and LC Bank.
"Financing Agreement" means each Financing Agreement, dated as of
-------------------
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,
--------------------
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
-------------------
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.
<PAGE>
<PAGE> 6
"Indenture" means each Indenture of Trust, dated as of October 1,
---------
1995 between the Issuer and the Trustee, pursuant to which a Series of Bonds
was issued.
"Initial Stated Amount" means $86,732,603 with respect to the
---------------------
Letter of Credit supporting the Series B Bonds; $20,713,787 with respect to
the Letter of Credit supporting the Series D Bonds; and $13,264,987 with
respect to the Letter of Credit supporting the Series E Bonds.
"Interest Component" has the meaning assigned to that term in the
------------------
second Preliminary Statement herein.
"Interest Period" means, with respect to a Eurodollar Rate
---------------
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
--------
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
-------- -------
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 Societe Generale, Los
------- ---------------------
Angeles 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
--------------
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.
<PAGE>
<PAGE> 7
"Level V Status" exists for any day if, on such day, (a) Level I,
--------------
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.
"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 Moody's Investors Service, Inc. or its successor
-------
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)
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor thereto.
"Person" means an individual, partnership, corporation (including
------
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
------------
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.
<PAGE>
<PAGE> 8
"Prime Rate" means a fluctuating annual rate of interest equal to
----------
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.
"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 each of the Series 1974 Bonds, the Series 1977
-----------
Bonds, the Series 1988 Bonds and the Series 1989 Bonds as defined in
Resolution No. 10-3-95-1 adopted by Clark County Nevada on October 3, 1995
and also includes the Coconino County, Arizona Collateralized Pollution
Control Revenue Bonds (Nevada Power Company Project) Series 1976.
"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 Moody's.
-------------
"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
-------
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
-----------------
Indenture.
"Required Banks" means, at any time, Banks having Shares equal to
--------------
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 B Bonds" means the Clark County, Nevada $85,000,000
--------------
Industrial Development Refunding Revenue Bonds (Nevada Power Company Project)
Series 1995B.
<PAGE>
<PAGE> 9
"Series D Bonds" means the Clark County, Nevada $20,300,000
--------------
Pollution Control Refunding Revenue Bonds (Nevada Power Company Project)
Series 1995D.
"Series E Bonds" means the Coconino County, Arizona Pollution
--------------
Control Corporation $13,000,000 Pollution Contol Refunding Revenue Bonds
(Nevada Power Company Project) Series 1995E.
"Series of Bonds" means any of the following Series of Bonds:
---------------
the Series B Bonds, the Series D Bonds, and the Series E Bonds.
"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).
"Societe Generale" means Societe Generale, Los Angeles Branch.
----------------
"S&P" means Standard & Poor's, a division of The McGraw-Hill
---
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
----------
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
--------------
Letter of Credit.
"Termination Event" means (i) a Reportable Event described in
-----------------
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.
<PAGE>
<PAGE> 10
"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
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
<PAGE>
<PAGE> 11
"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 this Agreement, and "Article," "Section,"
"subsection," "paragraph," and respective references are to this Agreement
unless otherwise specified.
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
<PAGE>
<PAGE> 12
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 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.
<PAGE>
<PAGE> 13
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, 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
<PAGE>
<PAGE> 14
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:
(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
<PAGE>
<PAGE> 15
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
Societe Generale, New York, ABA No. 0260-0422-6 for further credit to Nevada
Power NY LSA 9027238. 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
<PAGE>
<PAGE> 16
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 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
<PAGE>
<PAGE> 17
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
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
<PAGE>
<PAGE> 18
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
(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
<PAGE>
<PAGE> 19
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 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.
<PAGE>
<PAGE> 20
(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 Chapman and Cutler, 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.
(i) A letter from Best, Best & Krieger, 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 Richard L. Hinckley, 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 Richard L. Hinckley, 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 & Krieger, 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 Hughes Hubbard & Reed, New York counsel to the
Administrative Agent, will not exceed $17,500, plus disbursements.
(n) Receipt by the Administrative Agent of a letter from Moody's
or S&P assigning the rating of the LC Bank to the Bonds.
<PAGE>
<PAGE> 21
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
(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, California or French 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
<PAGE>
<PAGE> 22
(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 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.
<PAGE>
<PAGE> 23
(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 Subsidiaries before any 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.
<PAGE>
<PAGE> 24
(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 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;
<PAGE>
<PAGE> 25
(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;
(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.
<PAGE>
<PAGE> 26
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 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
<PAGE>
<PAGE> 27
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 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
<PAGE>
<PAGE> 28
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 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
<PAGE>
<PAGE> 29
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 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.
<PAGE>
<PAGE> 30
(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 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
<PAGE>
<PAGE> 31
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.
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
<PAGE>
<PAGE> 32
(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
(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
<PAGE>
<PAGE> 33
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.
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
<PAGE>
<PAGE> 34
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 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 6226 West Sahara Avenue, P.O. Box
230, Las Vegas, Nevada 89151, Attention: Mr. Richard C. Schmalz, Director,
<PAGE>
<PAGE> 35
Treasury, telecopy no. (702) 367-5864; and if to the LC Bank, to it at its
address at 2029 Century Park East, Suite 2900, Los Angeles, California 90067,
Attention: Minerva Arvisu, telecopy number (310) 203-0539 and if to the
Administrative Agent to it at its address at 2029 Century Park East, Suite
2900, Los Angeles, California 90067 Attention: Hillary Adkins, telecopy
number. (310) 203-0539; 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 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
<PAGE>
<PAGE> 36
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.
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
<PAGE>
<PAGE> 37
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 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
<PAGE>
<PAGE> 38
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
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
<PAGE>
<PAGE> 39
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).
(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
<PAGE>
<PAGE> 40
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 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
<PAGE>
<PAGE> 41
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 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
<PAGE>
<PAGE> 42
(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
r 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 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. Societe Generale and affiliates. With respect to
-------------------------------
its Share and the Reimbursement Obligations held by it, Societe Generale
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 Societe Generale in its individual capacity. Societe
Generale and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally
<PAGE>
<PAGE> 43
engage 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 Societe Generale 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 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.
<PAGE>
<PAGE> 44
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: R.C. Schmalz
-----------------------------------
Title: Director, Treasury
SOCIETE GENERALE, LOS ANGELES
BRANCH, as Administrative Agent
and LC Bank
By: George Chen
------------------------------------
Title: Vice President
George Chen
<PAGE>
<PAGE>
THE LONG TERM CREDIT BANK
OF JAPAN, LTD., LOS ANGELES
AGENCY, as a Bank
By: Mike Thieme
------------------------------------
Title: Deputy General Manager
<PAGE>
<PAGE>
THE BANK OF CALIFORNIA, N.A.,
as a Bank
By: Susan K. Johnson
------------------------------------
Title: Vice President
<PAGE>
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY,
as a Bank
By: S.C. Schumacher
-----------------------------------
Title: Sr. Vice President and Chief Manager
<PAGE>
<PAGE>
BANK OF MONTREAL, as a Bank
By: Warren R. Wimmer
-----------------------------------
Title: Warren R. Wimmer
Director
<PAGE>
<PAGE>
BANK HAPOALIM B.M., as a Bank
By: Jonathan Kulka Peter Dovas
-----------------------------------
Title: First Vice Peter Dovas
President and Vice President
Branch Manager
<PAGE>
<PAGE>
Schedule 4.01(q)
[Environmental Disclosure]
NONE
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Schedule 7.02
[Addresses and information for Banks]
Bank Share Address Wire Information
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Bank Hapoalim B.M. 12.4263% 1515 Market Street Federal Reserve Bank
Philadelphia, PA 19102 of Philadelphia
Attn: Ellen Frank Acct: Bank Hapoalim
Tel: (215) 665-2251 B.M.
Fax: (215) 665-2217 ABA #: 036001581
Ref: Nevada Power
Bank of Montreal 12.4263% 601 South Figueroa St. Harris Trust & Savings
Suite 4900 Bank
Los Angeles, CA Chicago, Illinois
90017 ABA #: 071-000-288
Attn: Warren R. Wimmer Acct #: 124856-6
Tel: (213) 239-0633 For Credit to:
Fax: (213) 239-0680 Bank of Montreal
Letters of Credit
Account
Ref: Nevada Power Co.
The Long Term 12.4263% 444 South Flower St. First Interstate Bank
Credit Bank of Suite 3700 Los Angeles, CA
Japan Ltd., Los Angeles, CA 90071 ABA #: 122000218
Los Angeles Agency Attn: Micheal Yurkas Further Credit:
Tel: (213) 689-6321 LTCB-Los Angeles
Fax: (213) 622-6908 Agency
A/C #: 220234834
The Mitsubishi 8.2842% 801 S. Figueroa St. Bank of America
Trust & Banking 24th Floor San Francisco, CA
Corporation, Los Angeles, CA 90017 ABA #: 121-0003-58
Los Angeles Agency Attention: H. Rachel Further Credit:
Ono The Mitsubishi Trust
Tel: (213) 896-4665 and Banking Corporation
Fax: (213) 687-4631 LA Agency
A/C #: 62908-04915
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2
The Bank of 12.4263% 550 South Hope The Bank of
California Street, California, N.A.
3rd Floor San Francisco, CA
Los Angeles, CA ABA #: 121000015
90071 A/C #: 001 060 235
Attn: Susan K. Johnson Ref: Nevada Power Co.
Tel: (213) 243-3535
Fax: (213) 243-3552
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EXHIBIT A
FORM OF LETTER OF CREDIT
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IRREVOCABLE LETTER OF CREDIT
NO. ________________
[Issuance date of the Letter of Credit]
United States Trust Company
of New York, as Trustee
114 West 47th Street
New York, New York 10036
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
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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
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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
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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
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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
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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)
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Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented to our office at 2029 Century Park
East, Suite 2900, Los Angeles, California 90067 Attention: Minerva Arvisu
(or at such other office as we may designate by written notice to you) or
upon prior telephone notice to us at (310) 788-7119, by facsimile
transmission received by us at the following telecopier number: (310)
203-0539 (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
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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
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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, Societe Generale, Los Angeles 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
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entitled to give any such notice in the event that, pursuant to our
direction,
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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
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shall be in writing and shall be addressed to us at 2029 Century Park East,
Suite 2900, Los Angeles, California 90067, Attention: Minerva Arvisu (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:
(310) 788-0539 (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
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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
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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
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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,
SOCIETE GENERALE, LOS ANGELES BRANCH
By:
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Title:
A-5
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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 Societe Generale, Los Angeles
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,
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1. To be used for regularly scheduled interest payments.
2. To be used upon scheduled or accelerated maturity of the Bonds.
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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
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Title:
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3. Insert appropriate bracketed language.
4. To be used upon scheduled or accelerated maturity of the Bonds.
A-7
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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 Societe Generale, Los
Angeles 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 ________________, ____.
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[_______________], as Trustee
By
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Title:
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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 Societe Generale, Los
Angeles 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
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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.
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[(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 __________________, ____.
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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.
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[_______________], as Trustee
By
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Title:
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EXHIBIT 4
TO THE LETTER OF CREDIT
NOTICE OF REINSTATEMENT
The undersigned, a duly authorized officer of Societe Generale,
Los Angeles 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 given them 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: $____________
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1. To be used in event of actual receipt of reimbursed amounts.
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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
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Title:
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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.
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EXHIBIT 5
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
------------------------
Societe Generale
Los Angeles Branch
2029 Century Park East
Suite 2900
Los Angeles, California 90067
Attention: Minerva Arvisu
Re: Irrevocable Letter of Credit No. ______ issued by Societe Generale,
Los Angeles Branch]
Gentlemen:
The undersigned, as Trustee under the Indenture of Trust dated as
of October 1, 1995 by and between [Clark County, Nevada/Coconino County],
Arizona (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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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 SOCIETE GENERALE,
LOS ANGELES BRANCH, as Letter of Credit Bank (the "Bank").
WHEREAS, at the request of the Company, Clark County, Nevada and
Coconino County, Arizona Pollution Control Corporation (collectively the
"Issuer") issued and sold, respectively, their Industrial Development
Revenue Refunding Bonds, (Nevada Power Company Project) Series B, D and E
(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 Societe Generale, Los Angeles 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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
<PAGE>
<PAGE>
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 court 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
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<PAGE>
(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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
6226 West Sahara Avenue
P.O. Box 230
Las Vegas, Nevada 89151
Telecopy: (702) 367-8803
Attention: Treasurer
By
-----------------------------------
Title:
THE UNITED STATES TRUST COMPANY OF
NEW YORK, as Custodian
Attention:
By:
------------------------------------
Title:
SOCIETE GENERALE, LOS ANGELES BRANCH
By:
------------------------------------
Title:
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<PAGE>
EXHIBIT C
[LETTERHEAD OF GENERAL COUNSEL OF THE COMPANY]
[Date of Issuance of
Letter of Credit]
Societe Generale, Los Angeles Branch,
as Administrative Agent and the Banks party
to the Reimbursement Agreement referred to below
Clark County, Nevada
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"), Societe Generale, 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").
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<PAGE>
(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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
EXHIBIT D
[LETTERHEAD OF SPECIAL COUNSEL TO THE COMPANY]
[Dates of Issuance of
Letter of Credit]
To Societe Generale, Los Angeles Branch,
as Administrative Agent and the Banks party
to the Reimbursement Agreement referred to below
Clark County, Nevada
Nevada Power Company
--------------------
Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(n) of
the Letter of Credit and Reimbursement Agreement, dated as of October 1,
1995 (the "Reimbursement Agreement"), among Nevada Power Company (the
"Company"), Societe Generale, 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
D-1
<PAGE>
<PAGE>
the Company or its officers or of public officials. We 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.
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 Richard L. Hinckley, 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
D-2
<PAGE>
<PAGE>
lead us to believe that the present transaction would be contrary to
public policy 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
<PAGE>
<PAGE>
===============================================================================
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
===============================================================================
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
----
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-
<PAGE>
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
----
EXHIBIT C Form of Opinion of General Counsel of the Company
EXHIBIT D Form of Opinion of Special Counsel to the Company
-iii-
<PAGE>
<PAGE>
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) Clark 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,
---------------------
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).
--------
"Administrative Agent" means Barclays, acting in its capacity as
--------------------
Administrative Agent for the Banks hereunder, and any successor
Administrative Agent.
"Affiliate" means any trade or business (whether or not
---------
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
----------------------------
in effect.
<PAGE>
<PAGE> 2
"Applicable L/C Rate" shall mean the following percentages: (i)
-------------------
.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
--------------------------
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.
--------
"Base Rate" means a fluctuating interest rate per annum equal at
---------
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
-----------------
Rate.
"Bond Purchase Agreement" means the Bond Purchase Agreement
-------------------------
executed with respect to each Series of Bonds.
"Bonds" means, collectively, the Series A Bonds and the Series C
-----
Bonds.
"Business Day" means a day of the year on which banks are not
------------
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
-----------------
Letter of Credit.
"Code" means the Internal Revenue Code of 1986, as amended from
----
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
----------
Preliminary Statement hereto.
"Commitment Termination Date" has the meaning assigned to that
---------------------------
term in Section 2.01.
"Common Equity" means the common stockholders' equity of the
-------------
Company, less the book value of all intangible assets of the Company.
<PAGE>
<PAGE> 3
"Common Stock" means the $1.00 par value common stock of the
------------
Company.
"Custodian Agreement" means the Custodian Agreement in
-------------------
substantially the form of Exhibit B hereto.
"Date of Issuance" has the meaning assigned to that term in
----------------
Section 2.02.
"Debt" or "Indebtedness" means (i) indebtedness for borrowed money
---- ------------
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
------------
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
- --------
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
-----------------
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,
-------------------
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
------------------
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
-- ----
Material Transportation Act ( 49 U.S.C . Subsection 1801 et seq. ), the
-- ----
Resource Conservation
<PAGE>
<PAGE> 4
and Recovery Act ( 42 U.S.C. Subsection 6901 et seq. ), the Federal Water
-- ----
Pollution Control Act (33 U.S.C. Subsection 1251 et seq.), the Clean Air Act
-- ----
(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
-- ----
Right to Know Act (42 U.S.C. Subsection 11001 et seq.), each as amended or
-- ----
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.
-----
"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
---------------
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
-----------------------
Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" means for any Interest Period
----------------------------------
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
----------------
Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
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.
<PAGE>
<PAGE> 5
"Fee Letter" means that certain letter agreement dated the Date of
----------
Issuance executed by the Company and addressed to the Administrative Agent
and LC Bank.
"Financing Agreement" means each Financing Agreement, dated as of
-------------------
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,
--------------------
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
-------------------
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,
---------
1995 between the Issuer and the Trustee, pursuant to which a Series of Bonds
was issued.
<PAGE>
<PAGE> 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
------------------
second Preliminary Statement herein.
"Interest Period" means, with respect to a Eurodollar Rate
---------------
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
--------
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
-------- -------
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
------- ---------------------
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
--------------
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,
--------------
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.
<PAGE>
<PAGE> 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 Moody's Investors Service, Inc. or its successor
-------
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)
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor thereto.
"Person" means an individual, partnership, corporation (including
------
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
------------
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
----------
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.
<PAGE>
<PAGE> 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
-----------
No. 10-3-95-1 adopted by Clark 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 Moody's.
-------------
"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
-------
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
-----------------
Indenture.
"Required Banks" means, at any time, Banks having Shares equal to
--------------
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.
<PAGE>
<PAGE> 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 McGraw-Hill
---
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
----------
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
--------------
Letter of Credit.
"Termination Event" means (i) a Reportable Event described in
-----------------
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
<PAGE>
<PAGE> 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.
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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,
<PAGE>
<PAGE> 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:
<PAGE>
<PAGE> 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. 026-002-574 at the Federal Reserve
Bank of New York for credit to CLAD Control Account, Account No. 050-019014,
referencing Nevada Power
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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 Chapman and Cutler, 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.
<PAGE>
<PAGE> 20
(i) A letter from Best, Best & Krieger, 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 Richard L. Hinckley, 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 Richard L. Hinckley, 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 & Krieger, 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 Hughes Hubbard & Reed, New York counsel to the
Administrative Agent, will not exceed $17,500, plus disbursements.
(n) Receipt by the Administrative Agent of a letter from Moody's
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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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;
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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.
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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.
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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 6226 West Sahara Avenue, P.O. Box
230, Las Vegas, Nevada 89151, Attention: Mr. Richard C. Schmalz, Director,
Treasury, telecopy no. (702) 367-5864; and if to the LC Bank, to it at its
address at 75 Wall Street, New York, New York 10265, Attention: Trade
Services Group, telecopy number (212) 412-5111 and if to the Administrative
Agent to it at its address at 222 Broadway, New York, New York 10038,
Attention: Client Services Unit, telecopy No. (212) 412-2546; 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
<PAGE>
<PAGE> 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.
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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).
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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
<PAGE>
<PAGE> 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: R. C. SCHMALZ
-----------------------------------
Title: Director, Treasury
BARCLAYS BANK, PLC, NEW YORK
BRANCH, as Administrative Agent
and LC Bank
By: JOHN P. BURKE
------------------------------------
Title: Associate Director
<PAGE>
<PAGE>
UNION BANK OF SWITZERLAND,
LOS ANGELES BRANCH,
as a Bank
By: DANIEL H. TO
-------------------
Title: Daniel H. To
Assistant Vice President
By: SCOTT SOMMERS
--------------------
Title: L. Scott Sommers
Vice President
<PAGE>
<PAGE>
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
as a Bank
By: SALVATORE BATTINELLI
---------------------------
Title: VP
By: KAREN E. HAPLOCK
-----------------------
Title: VP
<PAGE>
<PAGE>
UNION BANK, as a Bank
By: JOHN M. EDMONSTON
------------------------
Title: V.P.
<PAGE>
<PAGE>
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY,
as a Bank
By: NOBUHIRO UMEMURA
-----------------------
Title: NOBUHIRO UMEMURA
JOINT GENERAL MANAGER
<PAGE>
<PAGE>
ABN AMRO BANK N.V.,
as a Bank
By: DAVID B. BRYANT
----------------------
Title: David B. Bryant
Vice President
By: KEVIN S. MCFOLDEN
------------------------
Title: Kevin S. McFolden
AVP
<PAGE>
<PAGE>
Schedule 4.01(q)
[Environmental Disclosure]
NONE
<PAGE>
<PAGE>
Schedule 7.02
[Addresses and information for Banks]
Bank Share Address Wire Information
- ---- ----- ------- ----------------
ABN Amro Bank N.V., 16.2323% 135 S. LaSalle Street ABN Amro New York
San Francisco Suite 711 New York, NY
International Chicago, IL 60603 ABA# 026009580
Branch Attention: David For Credit to
Bryant ABN Amro
Tel: (312)904-2799 San Francisco
Fax: (312)904-6387 Acct#
6510010545-41
101 California Ref: Nevada
Street, Power Co.
Suite 4550
San Francisco, CA
94111-5812
Attention: L.T.
Osborne
Tel: (415) 984-3722
Fax: (415) 362-3524
The Fuji Bank, 16.2323% 333 S. Grand Avenue, First
Limited, #2500 Interstate Bank
Los Angeles Los Angeles, CA of California
Agency 90071 Los Angeles
Attention: Ching L. Main Office
Lim ABA# 122000218
Tel: (213) 253-4179 For Credit to:
Fax: (213) 253-4198 The Fuji Bank,
Limited, Los
Angeles Agency
Acct # 220834831
Ref: Nevada Power
Union Bank 16.2323% Energy Capital Union Bank
Services Monterey Park,
445 S. Figueroa Califoria
Street, 15th Flr ABA# 122-000-
Los Angeles, CA 496
90071 Acct# 77070-
Attention: David 196431
Musicant Attention: 192
Tel: (213) 236-5023 Note Center
Fax: (213) 236-4096 Ref: Nevada
Power Company
<PAGE>
<PAGE> 2
Westdeutsche 16.2323% 1211 Avenue of the Chase Manhattan
Landesbank Americas Bank
Girozentrale, New York, NY 10036 Chase Manhattan
New York Branch Attention: Karen Plaza
Haplock New York, NY
Tel: (212) 852-6087 WestLB New York
Fax: (212) 852-6148 Branch
Acct#
633 West Fifth Street 9201060663
Suite 6750 Ref: Nevada
Los Angeles, CA Power Co.
90071 ABA 021000021
Attention: Nancy
Tafoya CHIPS 201
Tel: (213) 623-2958 Swift WELAUS3X
Fax: (213) 623-4706
Union Bank of 16.2323% 444 South Flower Union Bank of
Switzerland, Street, Switzerland
Los Angeles 45th Floor New York
Branch Los Angeles, CA Fed Routing No.
90071 026008439
Attention: Daniel To Favor of UBS
Tel: (213) 489-0646 Los Angeles
Fax: (213) 489-0697 Account No. 40064502
Ref: Nevada Power Co.
<PAGE>
<PAGE>
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
114 West 47th Street
New York, New York 10036
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
Drafts and certificates hereunder shall be dated the date of
presentation and shall be presented to our office at 75 Wall Street, New
York, New York, 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 (212) 412-5121 or 5122, by facsimile transmission received by us at
the following telecopier number: (212) 412-5111 (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
<PAGE>
<PAGE>
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 75 Wall Street, New
York, New York 10265, 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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
[ ], as Trustee
---------------
By
--------------------------------------
Title:
A-9
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
[(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
<PAGE>
<PAGE>
[ ], as Trustee
---------------
By
---------------------------------
Title:
A-12
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
EXHIBIT 5
TO THE LETTER OF CREDIT
INSTRUCTIONS TO TRANSFER
------------------------
Barclays Bank PLC,
New York Branch
75 Wall Street
New York, New York 10265
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 Clark 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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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, Clark 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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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
<PAGE>
<PAGE>
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.
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(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.
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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
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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
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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.
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<PAGE>
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
6226 West Sahara Avenue
P.O. Box 230
Las Vegas, Nevada 89151
Telecopy: (702) 367-8803
Attention: Treasurer
By
-----------------------------------
Title:
THE UNITED STATES TRUST COMPANY OF
NEW YORK, as Custodian
Attention:
By:
------------------------------------
Title:
BARCLAYS BANK PLC, NEW YORK BRANCH
By
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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").
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(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
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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
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<PAGE>
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
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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 Richard L. Hinckley, 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
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<PAGE>
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
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