FINANCING AGREEMENT Dated as of September 1, 2008 By and Between CLARK COUNTY, NEVADA and SOUTHWEST GAS CORPORATION relating to CLARK COUNTY, NEVADA INDUSTRIAL DEVELOPMENT REVENUE BONDS (SOUTHWEST GAS CORPORATION PROJECT) SERIES 2008A
Dated as
of September 1, 2008
By and
Between
XXXXX
COUNTY, NEVADA
and
SOUTHWEST
GAS CORPORATION
relating
to
XXXXX
COUNTY, NEVADA
INDUSTRIAL
DEVELOPMENT REVENUE BONDS
(SOUTHWEST
GAS CORPORATION PROJECT)
SERIES
2008A
TABLE
OF CONTENTS
Page
1
|
|||
SECTION
1.1
|
Definitions
of Terms
|
1
|
|
SECTION
1.2
|
Number
and Gender
|
1
|
|
SECTION
1.3
|
Articles,
Sections
|
1
|
|
ARTICLE
II REPRESENTATIONS
|
2
|
||
SECTION
2.1
|
Representations
by the Issuer
|
2
|
|
SECTION
2.2
|
Representations
by the Borrower
|
2
|
|
ARTICLE
III THE PROJECT; ISSUANCE OF THE BONDS
|
4
|
||
SECTION
3.1
|
The
Project
|
4
|
|
SECTION
3.2
|
Agreement
to Issue Bonds; Application of Bond Proceeds
|
4
|
|
SECTION
3.3
|
Investment
of Moneys
|
4
|
|
SECTION
3.4
|
Costs
of Issuance
|
4
|
|
ARTICLE
IV LOAN AND PROVISIONS FOR REPAYMENT
|
5
|
||
SECTION
4.1
|
Loan
of Bond Proceeds
|
5
|
|
SECTION
4.2
|
Loan
Repayments and Other Amounts Payable
|
5
|
|
SECTION
4.3
|
Unconditional
Obligation
|
7
|
|
SECTION
4.4
|
Payments
Pledged and Assigned
|
7
|
|
SECTION
4.5
|
Payment
of the Bonds and Other Amounts
|
8
|
|
ARTICLE
V SPECIAL COVENANTS AND AGREEMENTS
|
8
|
||
SECTION
5.1
|
Right
of Access to the Project and Records
|
8
|
|
SECTION
5.2
|
Borrower’s
Maintenance of Its Existence; Assignments
|
9
|
|
SECTION
5.3
|
Insurance
|
10
|
|
SECTION
5.4
|
Maintenance
and Repair; Taxes; Utility and Other Charges
|
10
|
|
SECTION
5.5
|
Qualification
in Nevada
|
11
|
|
SECTION
5.6
|
No
Warranty by the Issuer
|
11
|
|
SECTION
5.7
|
Agreement
as to Use of the Project
|
11
|
|
SECTION
5.8
|
Notices
and Certificates Required to be Delivered to the Trustee
|
11
|
|
SECTION
5.9
|
Borrower
to Furnish Notice of Adjustments of Interest Rate Periods
|
12
|
|
SECTION
5.10
|
Information
Reporting
|
12
|
|
SECTION
5.11
|
Tax
Covenants; Rebate
|
12
|
|
SECTION
5.12
|
Continuing
Disclosure
|
13
|
|
SECTION
5.13
|
Liquidity
Facility
|
13
|
|
SECTION
5.14
|
Letter
of Credit
|
00
|
-x-
XXXXXXX
5.15
|
Requirement
to Deliver Letter of Credit or Liquidity Facility Under Certain
Circumstances
|
14
|
|
SECTION
5.16
|
Bond
Insurance
|
14
|
|
ARTICLE
VI EVENTS OF DEFAULT AND REMEDIES
|
15
|
||
SECTION
6.1
|
Events
of Default Defined
|
15
|
|
SECTION
6.2
|
Remedies
on Default
|
16
|
|
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 OPTION AND OBLIGATION OF BORROWER TO PREPAY
|
19
|
||
SECTION
7.1
|
Option
to Prepay
|
19
|
|
SECTION
7.2
|
Obligation
to Prepay
|
20
|
|
SECTION
7.3
|
Notice
of Prepayment; Amount to be Prepaid
|
20
|
|
SECTION
7.4
|
Cancellation
at Expiration of Term
|
20
|
|
ARTICLE
VIII NON-LIABILITY OF ISSUER
|
21
|
||
SECTION
8.1
|
Non-Liability
of the Issuer
|
21
|
|
ARTICLE
IX MISCELLANEOUS
|
21
|
||
SECTION
9.1
|
Notices
|
21
|
|
SECTION
9.2
|
Assignments
|
21
|
|
SECTION
9.3
|
Severability
|
21
|
|
SECTION
9.4
|
Execution
of Counterparts
|
21
|
|
SECTION
9.5
|
Amounts
Remaining in Bond Fund
|
22
|
|
SECTION
9.6
|
Amendments,
Changes and Modifications
|
22
|
|
SECTION
9.7
|
Governing
Law
|
22
|
|
SECTION
9.8
|
Authorized
Issuer and Borrower Representatives
|
22
|
|
SECTION
9.9
|
Term
of the Agreement
|
22
|
|
SECTION
9.10
|
Binding
Effect
|
22
|
|
SECTION
9.11
|
Trustee
as a Party in Interest and Third Party Beneficiary
|
22
|
|
EXHIBIT
A-1 DESCRIPTION OF THE PROJECT
|
A-1
|
-ii-
THIS
FINANCING AGREEMENT made and entered into as of September 1, 2008 (this
“Agreement”), by and between XXXXX COUNTY, NEVADA, a political subdivision of
the State of Nevada, party of the first part (hereinafter sometimes referred to
as the “Issuer”), and SOUTHWEST GAS CORPORATION, a California corporation, party
of the second part (hereinafter sometimes referred to as the
“Borrower”),
WHEREAS,
concurrently with the execution and delivery of this Agreement, the Issuer is
entering into an Indenture of Trust, dated as of September 1, 2008 (the
“Indenture”), with The Bank of New York Mellon Trust Company N.A., as trustee
(the “Trustee”) thereunder, pursuant to which $50,000,000 principal amount of
Xxxxx County, Nevada Industrial Development Revenue Bonds (Southwest Gas
Corporation Project) Series 2008A (the “Bonds”), will be issued and secured;
and
ARTICLE
I
“Event of
Default” under this Agreement is defined in Section 6.1.
ARTICLE
II
(a) The
Issuer is a political subdivision of the State. Under the provisions
of the Act, the Issuer has the power to enter into the transactions contemplated
by this Agreement and to carry out its obligations hereunder. By
proper action, the Issuer has been duly authorized to execute, deliver and duly
perform this Agreement and the Indenture. To the extent the foregoing
representation involves a legal conclusion, such representation is made in
reliance on the opinion of Bond Counsel.
(b) To
refinance part of the Cost of the Project, including the refunding of the
Refunded Bonds, the Issuer will issue the Bonds, which will mature, bear
interest and be subject to redemption as provided in the Indenture.
(c) The
Issuer’s interest in this Agreement (except certain rights of the Issuer to
payment of fees and expenses and indemnification, to rights of inspection and to
consents and rights to receive any notices, certificates, requests, requisitions
and other communications) will be pledged to the Trustee as security for payment
of the principal of, and premium, if any, and interest on the
Bonds.
(d) The
Issuer has not pledged and will not pledge its interest in this Agreement for
any purpose other than to secure the Bonds under the Indenture.
(e) The
Issuer is not in default under any of the provisions of the laws of the State
which default would affect its existence or its powers referred to in subsection
(a) of this Section 2.1.
(f) The
Issuer has found and determined and hereby finds and determines that all
requirements of the Act with respect to the issuance of the Bonds and the
execution of this Agreement and the Indenture have been complied with and that
refinancing the Project, including the refunding of the Refunded Bonds, by
issuing the Bonds and entering into this Agreement and the Indenture is in the
public interest, serves the public purposes and meets the requirements of the
Act.
(g) On
September 16, 2008, the Issuer adopted its resolution approving the issuance of
the Bonds.
(h) No
member, officer or other official of the Issuer has any interest whatsoever in
the Borrower or in the transactions contemplated by this Agreement.
2
(a) The
Borrower is a corporation duly incorporated and in good standing in the State of
California, is duly qualified to transact business and in good standing in the
State, has power to enter into and by proper corporate action has been duly
authorized to execute and deliver this Agreement and all other documents
contemplated hereby to be executed by the Borrower in connection with the
issuance and sale of the Bonds.
(b) Neither
the execution and delivery of this Agreement or any other documents contemplated
hereby to be executed by the Borrower in connection with the issuance and sale
of the Bonds, the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
conflicts with or results in a breach of any of the terms, conditions or
provisions of the Borrower’s articles of incorporation or by-laws or of any
corporate actions or of any agreement or instrument to which the Borrower is now
a party or by which it is bound, or constitutes a default (with due notice or
the passage of time or both) under any of the foregoing, or result in the
creation or imposition of any prohibited lien, charge or encumbrance whatsoever
upon any of the property or assets of the Borrower under the terms of any
instrument or agreement to which the Borrower is now a party or by which it is
bound.
(c) The
Cost of the Project is as set forth in the Tax Certificate and has been
determined in accordance with sound engineering/construction and accounting
principles. All the information provided by, and all the
representations made by, the Borrower in the Tax Certificate are true and
correct as of the date thereof.
(d) The
Project consists of those facilities described in Exhibit A to this Agreement
and in the Southwest Gas Corporation Engineering Certificate dated the date of
issuance of the Bonds (the “Engineering Certificate”) which is incorporated by
reference herein, and the Borrower shall not make any changes to the Project
except as otherwise permitted hereunder or to the operation thereof which would
affect the qualification of the Project under the Act or impair the Tax-Exempt
status of the Bonds. In particular, the Borrower shall comply with
all requirements set forth in the Tax Certificate. The Borrower
intends to cause the Project to be used for the local furnishing of natural gas
until the principal of, the premium, if any, and the interest on the Bonds shall
have been paid.
(e) The
Borrower has and will have title to and all necessary easements to install the
Project, sufficient to carry out the purposes of this Agreement.
(f) At
the time of original submission of an application to the Issuer for financial
assistance in connection with the Project and on the dates on which the Issuer
took action on such application, permanent financing for the Project had not
otherwise been obtained or arranged.
(g) All
certificates, approvals, permits and authorizations with respect to the
construction of the Project of agencies of applicable local governments, the
State and the federal government have been obtained or will be obtained in the
normal course of business.
3
(h) No
event has occurred and no condition exists which would constitute an Event of
Default or which with the passing of time or with the giving of notice or both
would become such an Event of Default.
(i) To
the best of the knowledge of the Borrower, no member, officer, or other official
of the Issuer has any interest whatsoever in the Borrower or in the transactions
contemplated by this Agreement.
(j) The
Borrower has reviewed the Indenture and hereby accepts the terms
thereof.
ARTICLE
III
4
ARTICLE
IV
(b) The
Issuer and the Borrower expressly reserve the right to enter into, to the extent
permitted by law, an agreement or agreements other than this Agreement, with
respect to the issuance by the Issuer, under an indenture or indentures other
than the Indenture, of obligations to provide additional funds to pay costs of
the Project or any other facilities for the Borrower or to refund all or any
principal amount of the Bonds (or any portions thereof), or any combination
thereof.
(b) The
Borrower shall pay or cause to be paid to the Trustee amounts equal to the
amounts to be paid by the Trustee for the purchase of Bonds which have not been
remarketed pursuant to Article IV of the Indenture and the premium, if any, on
the Bonds which have been remarketed pursuant to Article IV of the Indenture, in
each case as and to the extent provided in the Indenture. Such
amounts shall be paid or caused to be paid by the Borrower to the Trustee,
acting as Tender Agent (or, for so long as the Bonds are Book-Entry Bonds, to
the Securities Depository), in immediately available funds on the dates and no
later than the times such payments pursuant to Section 4.05 of the Indenture are
to be made. In the event the Borrower shall fail to make (or cause to
be made) any of the payments required in this subsection, the payment so in
default shall continue as an obligation of the Borrower until the amount in
default shall have been fully paid. The obligation of the Borrower to
make any payment under this subsection shall be deemed to have been satisfied to
the extent of any corresponding payment made by a Bank or a Liquidity Provider
to the Trustee under any Letter of Credit or Liquidity Facility.
5
(c) The
Borrower agrees to pay to the Trustee, (i) the reasonable fees,
charges and expenses of the Trustee, as Registrar, and as Paying Agent and
Tender Agent, as and when the same become due, and (ii) the reasonable
fees, charges and expenses of the Trustee, as and when the same become due under
the Indenture, including payments under Section 6.4 hereof, and including the
annual fee of the Trustee for the services rendered by it and the expenses
incurred by it under the Indenture. In the event the Borrower should
fail to make any of the payments required in this subsection, the item or
installment so in default shall continue as an obligation of the Borrower until
the amount in default shall have been fully paid; provided, however, that such
failure of payment shall not be deemed an event of default during the period in
which the Borrower is in good faith contesting, by appropriate proceedings
promptly initiated and diligently conducted, such payment required by this
subsection. The provision of this subsection shall survive the
retirement of the Bonds and the termination of this Agreement.
(d) The
Borrower shall pay to the Issuer upon demand all Administrative Expenses,
including payments under Section 6.4 hereof. In the event the
Borrower should fail to make any of the payments required in this subsection,
the item or installment so in default shall continue as an obligation of the
Borrower until the amount in default shall have been fully paid.
(e) The
Borrower releases the Issuer and the Trustee from, and covenants and agrees that
neither the Issuer nor the Trustee shall be liable for, and covenants and
agrees, to the extent permitted by law, to indemnify and hold harmless the
Issuer and the Trustee and their directors, officers, employees and agents from
and against, any and all losses, claims, damages, liabilities or expenses, of
every conceivable kind, character and nature whatsoever arising out of,
resulting from or in any way connected with (1) the Project, or the conditions,
occupancy, use, possession, conduct or management of, or work done in or about,
or from the planning, design, acquisition, installation or construction of the
Project or any part thereof (including without limitation any of the foregoing
relating to any federal, state or local environmental law, rule or regulation);
(2) the issuance of any Bonds or any certifications, covenants or
representations made in connection therewith and the carrying out of any of the
transactions contemplated by the Bonds and this Agreement; (3) the Trustee’s
acceptance or administration of the trusts under the Indenture, or the exercise
or performance of any of its powers or duties under the Indenture; or (4) any
untrue statement or alleged untrue statement of any material fact necessary to
make the statements made, in the light of the circumstances under which they
were made, not misleading, in any official statement or other offering circular
utilized by the Issuer or any underwriter or placement agent in connection with
the sale or remarketing of any Bonds; provided that such indemnity shall not be
required for damages that are determined to have been caused by willful
misconduct (or, as to the Trustee, negligence), including willful misconduct
(or, as to the Trustee, negligence) in the provision of any statements or
information, on the part of the party seeking such indemnity. The
Borrower further covenants and agrees, to the extent permitted by law, to pay or
to reimburse the Issuer and the Trustee and their respective officers, employees
and agents for any and all costs, reasonable attorneys’ fees, liabilities or
expenses incurred in connection with investigating, defending against or
otherwise in connection with any such losses, claims, damages, liabilities,
expenses or actions, except to the extent that the same are determined to have
been caused by the willful misconduct (or, as to the Trustee, negligence) of the
party claiming such payment or reimbursement. The provisions of this
Section shall survive the retirement of the Bonds and the expiration of this
Agreement.
6
The
indemnified party shall promptly notify the Borrower in writing of any claim or
action (of which such indemnified party has received written notice) covered by
this indemnity and brought against the indemnified party, or in respect of which
indemnity may be sought against the Borrower, setting forth the particulars of
such claim or action, and the Borrower will assume the defense thereof,
including the employment of counsel satisfactory to the indemnified party and
the payment of all expenses. The indemnified party may employ
separate counsel in any such action and participate in the defense thereof, and
the fees and expenses of such counsel shall be payable by the
Borrower.
(f) The
Borrower agrees to pay to the Remarketing Agent and the Auction Agent the
reasonable fees, charges and expenses of such Remarketing Agent and Auction
Agent, and the Issuer shall have no obligation or liability with respect to the
payment of any such fees, charges or expenses.
(g) The
Borrower agrees to pay any Rebate Requirement (as defined in the Tax
Certificate) to the Trustee for deposit in the Rebate Fund.
(h) The
Borrower also agrees to pay, (i) as soon as practicable after receipt of
request for payment thereof, all expenses required to be paid by the Borrower
under the terms of any bond purchase agreement relating to the sale of the
Bonds; (ii) at the time of issuance of the Bonds, the Issuer’s
administrative fee in the amount of $50,000; and (iii) at the time of
issuance of any Bonds, all reasonable expenses of the Issuer related to such
Bonds which are not otherwise required to be paid by the Borrower under the
terms of this Agreement.
7
Agent and
the Auction Agent pursuant to Section 4.2(f) hereof and the Reserved Rights of
the Issuer) are pledged and assigned to the Trustee by the
Indenture. The Borrower consents to such pledge and assignment. The
Issuer hereby directs the Borrower and the Borrower hereby agrees to pay or
cause to be paid to the Trustee all said amounts required to be paid by or for
the account of the Borrower pursuant to Section 4.2 hereof (except payments to
be made directly to the Remarketing Agent and the Auction Agent pursuant to
Section 4.2(f) hereof and payments to be made directly to the Issuer pursuant to
Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof). The Project will not
constitute any part of the security for the Bonds.
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, pursuant to the terms of the
Indenture, such Bonds are thereby deemed paid in full, the Trustee shall notify
the Borrower and the Issuer that such payment requirement has been
satisfied. Subject to the foregoing, or unless the Borrower is
entitled to a credit under this Agreement or the Indenture, all payments shall
be in the full amount required by Sections 4.2(a) and (b) hereof.
ARTICLE
V
8
(a) To
the extent permitted by law and its articles of incorporation, the Borrower
agrees that during the term of this Agreement it will maintain its corporate
existence in good standing and its authorization to do business in the State and
will not dissolve or otherwise dispose of all or substantially all of its assets
and will not consolidate with or merge into another Person or permit one or more
other Persons to consolidate with or merge into it; provided, however, that the
Borrower may, without violating the covenants in this Section, merge into or
consolidate with or transfer all or substantially all of its assets to a
wholly-owned subsidiary of the Borrower; and provided further that the Borrower
may, without violating the covenants in this Section, combine, consolidate with
or merge into another Person qualified to do business in one of the states of
the United States, or permit one or more other Persons to combine, consolidate
with or merge into it, or sell to another Person all or substantially all of its
assets, if:
(i) the
surviving, resulting or transferee Person, as the case may be (A) assumes and
agrees in writing to pay and perform all of the obligations of the Borrower
hereunder, unless such obligations are assumed by operation of law, and (B) is
qualified to do business in the State;
(ii) any
existing Bond Insurance, Liquidity Facility or Letter of Credit will remain in
full force and effect or will be replaced as provided in Sections 5.13 or 5.14,
or 5.16, or the Bonds shall have been redeemed or have been converted to a
different Rate Period following a mandatory tender;
(iii) the
long-term ratings on the outstanding Bonds, as applicable, shall be no lower
than the lower of (1) “Baa3” from Xxxxx’x or “BBB-” from S&P, as applicable,
or (2) the long-term ratings on the outstanding Bonds immediately prior to the
transaction; and
(iv) the
short-term ratings on the outstanding Bonds, as applicable, shall be no lower
than the lower of (1) “A-1” from Xxxxx’x, “P-1” from S&P and “F-1” from
Fitch, as applicable, or (2) the short-term ratings on the outstanding Bonds
immediately prior to the transaction.
The
Borrower agrees to provide the Issuer such information as the Issuer may
reasonably request in order to assure compliance with this Section
5.2(a).
Within
ten (10) Business Days after the consummation of the merger or other transaction
described above, the Borrower shall (except as provided in the next sentence)
provide the Issuer, any Bond Insurer, any Bank, any Liquidity Provider and the
Trustee with counterpart copies of the merger instruments or other documents
constituting the transaction but only to the extent that such documents or
instruments are available to the public and not subject to any confidentiality
agreement or restriction, and an officer’s certificate satisfactory to the
Issuer executed by an Authorized Borrower Representative that all of the
provisions of this Section 5.2(a) have been complied with. In the
case of a (i) merger or consolidation of the Borrower and any wholly-owned
subsidiary of the Borrower or (ii) the transfer to any wholly-owned subsidiary
of the Borrower of all or substantially all of the assets of the Borrower, the
Borrower shall send the Issuer, any Bond Insurer, any Bank, any Liquidity
Provider and the Trustee a notice of such
9
merger
within ten (10) Business Days after its completion, together with the officer’s
certificate described in the preceding sentence.
Notwithstanding
any other provision of this Section 5.2, the Borrower need not comply with any
of the provisions of Section 5.2(a) if, at the time of such merger, combination,
sale of assets, dissolution or reorganization, the Bonds will be defeased as
provided in Article VIII of the Indenture or redeemed in full as provided in
Article III of the Indenture.
(b) The
rights and obligations of the Borrower under this Agreement may be assigned and
delegated, respectively, by the Borrower to any person in whole or in part,
subject, however, to each of the following conditions:
(i) No
assignment other than pursuant to subsection (a) of this Section shall relieve
the Borrower from primary liability for any of its obligations hereunder, and in
the event of any assignment not pursuant to said subsection (a) the Borrower
shall continue to remain primarily liable for the payments specified in Section
4.2 hereof and for performance and observance of the other agreements on its
part herein provided to be performed and observed by it.
(ii) Any
assignment from the Borrower shall retain for the Borrower such rights and
interests as will permit it to perform its obligations under this Agreement, and
any assignee from the Borrower shall assume in writing the obligations of the
Borrower hereunder to the extent of the interest assigned, unless such
obligations are assumed by operation of law.
(iii) The
Borrower shall, within thirty (30) days of each such assignment, furnish or
cause to be furnished to the Issuer and the Trustee a true and complete copy of
each such assignment together with an instrument of assumption, if required, and
an opinion of Counsel satisfactory to the Issuer that the Borrower has complied
with the provision of this Section 5.2(b).
(c) In
the case of any consolidation, merger or transfer pursuant to subsection (a)
hereof or any assignment pursuant to subsection (b) hereof, the Borrower shall
cause to be delivered to the Issuer and the Trustee, not later than the
effective date of such consolidation, merger, transfer or assignment, an opinion
of Bond Counsel to the effect that such consolidation, merger, transfer or
assignment will not, in and of itself, adversely affect the Tax-Exempt status of
any Bonds.
10
Project,
or cause the Project to be so maintained, during the term of this Agreement
(i) in as reasonably safe condition as its operations shall permit and
(ii) in good repair and in good operating condition, ordinary wear and tear
excepted, making from time to time all necessary repairs thereto and renewals
and replacements thereof.
The
Borrower agrees to pay or cause to be paid during the term of this Agreement all
taxes, governmental charges of any kind lawfully assessed or levied upon the
Project or any part thereof, all utility and other charges incurred in the
operation, maintenance, use, occupancy and upkeep of the Project and all
assessments and charges lawfully made by any governmental body for public
improvements that may be secured by a lien on the Project, provided that with
respect to special assessments or other governmental charges that may lawfully
be paid in installments over a period of years, the Borrower shall be obligated
to pay only such installments as are required to be paid during the term of this
Agreement. The Borrower may, at the Borrower’s expense and in the
Borrower’s name, in good faith, contest any such taxes, assessments and other
charges and, in the event of any such contest, may permit the taxes, assessments
or other charges so contested to remain unpaid during that period of such
contest and any appeal therefrom unless by such nonpayment the Project or any
part thereof will be subject to loss or forfeiture.
(a) Within
one hundred twenty (120) days of the end of the fiscal year of the Borrower, a
certificate of an Authorized Borrower Representative to the effect that (i) all
payments have been made under this Agreement and that, to the best of such
Authorized Borrower Representative’s knowledge, no Event of Default or event or
condition which with the passage of time or giving of notice or both would
constitute an Event of Default has occurred and is continuing and
(ii) audited financial statements of the Borrower for such fiscal
year;
(b) Upon
knowledge of an Event of Default under this Agreement or the Indenture, notice
of such Event of Default, such notice to include a description of the nature of
such event and what steps are being taken to remedy such Event of Default;
and
(c) Prompt
written disclosure of any significant change known to the Borrower that occurs
which would adversely impact the Trustee’s ability to perform its duties under
the Indenture, or of any conflicts which may result because of other business
dealings
11
between
the Trustee and the Borrower (including, without limitation, removal or
replacement of the Remarketing Agent, if any).
(a) The
Borrower covenants that it will not take any action which would adversely affect
the Tax-Exempt status of any of the Bonds, and will take, or require to be
taken, such acts as may be reasonably within its ability and as may from time to
time be required under applicable law or regulation to continue such Tax-Exempt
status of such Bonds; and, in furtherance of such covenants, the Borrower agrees
to comply with the Tax Certificate and the Engineering Certificate.
(b) The
Borrower covenants that it will not take any action or fail to take any action
with respect to the Bonds which would cause any of the Bonds to be “arbitrage
bonds” within the meaning of Section 148 of the 1986 Code.
(c) The
Borrower covenants that it will not use or permit the use of any property
refinanced with the proceeds of any of the Bonds by any person in such manner or
to such extent as would result in loss of the Tax-Exempt status of any of the
Bonds.
(d) The
Borrower shall calculate, or cause to be calculated, its rebate liability at
such times as are required by Section 148(f) of the 1986 Code and any temporary,
proposed or final Regulations as may be applicable to such Bonds from time to
time. The Borrower shall provide to the Trustee a copy of each
calculation of rebate liability prepared by or on behalf of the Borrower, which
documentation shall be made available to the Issuer upon request. The
Borrower shall make any and all payments to the Trustee for deposit in the
Rebate Fund, or as
12
otherwise
required to be made to the United States Department of the Treasury in
connection with any of the Bonds pursuant to Section 148(f) of the 1986
Code.
(e) Notwithstanding
any other provisions of this Agreement to the contrary, so long as necessary in
order to maintain the Tax-Exempt status of any of the Bonds, the covenants in
this Section 5.11 shall survive the payment for such Bonds and the interest
thereon, including any payment or defeasance thereof pursuant to Section 8.01 of
the Indenture.
Not less
than thirty (30) days prior to the delivery of a Liquidity Facility, the
Borrower shall (i) deliver to the Trustee and the Remarketing Agent a
written commitment for the delivery of such Liquidity Facility, (ii) inform
the Trustee and the Remarketing Agent of the date on which the Liquidity
Facility will become effective and (iii) inform the Trustee of the rating
expected to apply to the Bonds after the Liquidity Facility is
delivered. On or prior to the date of the delivery of a Liquidity
Facility to the Trustee, the Borrower shall cause to be furnished to the Trustee
and the Issuer (i) an opinion of Bond Counsel to the effect that the
delivery of such Liquidity Facility to the Trustee is authorized under the
Indenture and complies with the terms hereof and thereof and will not adversely
affect the Tax-Exempt status of the Bonds and (ii) an opinion to the effect
that the Liquidity Facility is exempt from registration under the Securities Act
of 1933, as amended, and is enforceable in accordance with its terms, except to
the extent that enforceability thereof may be limited by bankruptcy,
reorganization or similar laws limiting the enforceability of creditors’ rights
generally and except that no opinion need be expressed as to the availability of
any discretionary equitable rights.
13
Not less
than thirty (30) days prior to the delivery of a Letter of Credit, the Borrower
shall (i) deliver to the Trustee and the Remarketing Agent a written
commitment for the delivery of such Letter of Credit, (ii) inform the
Trustee and the Remarketing Agent of the date on which the Letter of Credit will
become effective and (iii) inform the Trustee of the rating expected to
apply to the Bonds after the Letter of Credit is delivered. On or
prior to the date of the delivery of a Letter of Credit to the Trustee, the
Borrower shall cause to be furnished to the Trustee and the Issuer (i) an
opinion of Bond Counsel to the effect that the delivery of such Letter of Credit
to the Trustee is authorized under the Indenture and complies with the terms
hereof and thereof and will not adversely affect the Tax-Exempt status the Bonds
and (ii) an opinion of counsel to the Bank to the effect that the Letter of
Credit is exempt from registration under the Securities Act of 1933, as amended,
and is enforceable in accordance with its terms, except to the extent that
enforceability thereof may be limited by bankruptcy, reorganization or similar
laws limiting the enforceability of creditors’ rights generally and except that
no opinion need be expressed as to the availability of any discretionary
equitable rights.
If a
Letter of Credit is already in effect, upon delivery of a new Letter of Credit
pursuant to this Section 5.14, the provider of the new Letter of Credit shall
refund to the provider of the existing Letter of Credit the purchase price of
all Outstanding Bank Bonds, including any accrued and unpaid interest on such
Bank Bonds, calculated as set forth in the Reimbursement Agreement relating to
the existing Letter of Credit, unless the Borrower pays such purchase price and
interest directly to the Bank.
Not less
than thirty (30) days prior to the delivery of any Bond Insurance, the Borrower
shall (i) deliver to the Trustee, the Remarketing Agent and the Auction
Agent a written commitment for the delivery of such Bond Insurance,
(ii) inform the Trustee, the Remarketing Agent and the Auction Agent of the
date on which the Bond Insurance will become effective and (iii) inform the
Trustee of the rating expected to apply to the Bonds after the Bond Insurance is
delivered. On or prior to the date of the delivery of any Bond
Insurance to the Trustee, the Borrower shall cause to be furnished to the
Trustee and the Issuer (i) an opinion of Bond Counsel
14
to the
effect that the delivery of such Bond Insurance to the Trustee is authorized
under the Indenture and complies with the terms hereof and thereof and will not
adversely affect the Tax-Exempt status of the Bonds and (ii) an opinion of
counsel to the Bond Insurer to the effect that the Bond Insurance is exempt from
registration under the Securities Act of 1933, as amended, and is enforceable in
accordance with its terms, except to the extent that enforceability thereof may
be limited by bankruptcy, reorganization or similar laws limiting the
enforceability of creditors’ rights generally and except that no opinion need be
expressed as to the availability of any discretionary equitable
rights.
ARTICLE
VI
(a) Failure
by the Borrower to pay when due any amounts required to be paid under
Section 4.2(a) or 4.2(b) hereof; or
(b) Failure
by the Borrower to observe and perform any covenant, condition or agreement on
its part to be observed or performed in this Agreement, other than as referred
to in (a) above, for a period of ninety (90) days after written notice,
specifying such failure and requesting that it be remedied and stating that such
notice is a “Notice of Default” hereunder, given to the Borrower by the Trustee
or to the Borrower and the Trustee by the Issuer, unless the Issuer and the
Trustee shall agree in writing to an extension of such time prior to its
expiration; provided, however, if the failure stated in the notice cannot be
corrected within the applicable period, the Issuer and the Trustee will not
unreasonably withhold their consent to an extension of such time if corrective
action is instituted within the applicable period and diligently pursued until
the failure is corrected and the fact of such non-correction, corrective action
or diligent pursuit is evidenced to the Trustee by a certificate of an
Authorized Borrower Representative; or
(c) A
proceeding or case shall be commenced, without the application or consent of the
Borrower, in any court of competent jurisdiction seeking (i) liquidation,
reorganization, dissolution, winding-up or composition or adjustment of debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of the Borrower or of all or any substantial part of its assets, or
(iii) similar relief under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts, and such
proceeding or cause shall continue undismissed, or an order, judgment, or decree
approving or ordering any of the foregoing shall be entered and shall continue
in effect for a period of ninety (90) days; or an order for relief against the
Borrower shall be entered against the Borrower in an involuntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or other
applicable law; or
(d) The
Borrower shall admit in writing its inability to pay its debts generally as they
become due or shall file a petition in voluntary bankruptcy or shall make any
general assignment for the benefit of its creditors, or shall consent to the
appointment of a receiver or
15
trustee
of all or substantially all of its property, or shall commence a voluntary case
under the United States Bankruptcy Code (as now or hereafter in effect), or
shall file in any court of competent jurisdiction a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or shall fail to controvert in
a timely or appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under such United States Bankruptcy Code or
other applicable law; or
(e) Dissolution
or liquidation of the Borrower; provided that the term “dissolution or
liquidation of the Borrower” shall not be construed to include the cessation of
the corporate existence of the Borrower resulting either from a merger or
consolidation of the Borrower into or with another corporation or a dissolution
or liquidation of the Borrower following a transfer of all or substantially all
of its assets as an entirety, under the conditions permitting such actions
contained in Section 5.2 hereof; or
(f) The
occurrence of an “Event of Default” under the Indenture (other than an Event of
Default described in Section 9.01(e) thereof); or
(g) Receipt
by the Trustee from any Bond Insurer, Bank or Liquidity Provider of notice of
the occurrence of an “event of default” relating to the Bond Insurance or under
the Reimbursement Agreement or Liquidity Facility.
The
foregoing provisions of Section 6.1(b) are subject to the following limitations:
If by reason of Force Majeure the Borrower is unable in whole or in part to
carry out its agreements on its part herein contained other than the obligations
on the part of the Borrower contained in Article IV and Section 6.4 hereof the
Borrower shall not be deemed in default during the continuance of such
inability. The Borrower agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Borrower from carrying
out its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Borrower
and the Borrower shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the sole judgment of the Borrower
unfavorable to the Borrower.
(a) The
Trustee may, to the extent and in the manner set forth in Section 9.02 of the
Indenture, by notice in writing to the Borrower declare the unpaid indebtedness
under Section 4.2(a) hereof to be due and payable immediately, if concurrently
with or prior to such notice the unpaid principal amount of the Bonds shall have
been declared to be due and payable, and upon any such declaration the same
(being an amount sufficient, together with other moneys available therefor in
the Bond Fund, to pay the unpaid principal of and premium, if any, and interest
accrued on the Bonds) shall become and shall be immediately due and payable as
liquidated damages.
16
(b) The
Issuer or the Trustee may take whatever action at law or in equity may appear
necessary or desirable to collect the payments and other amounts then due and
thereafter to become due hereunder or to enforce performance and observance of
any obligation, agreement or covenant of the Borrower hereunder; provided,
however, that nothing in Section 4.4 hereof shall be deemed to limit the rights
of the Issuer under this Section 6.2(b); provided, nevertheless, that the Issuer
will not exercise any remedies, with respect to any of the Issuer’s rights
assigned to the Trustee pursuant to Section 4.4 hereof unless, in the Issuer’s
reasonable judgment and after written request to a Responsible Officer of the
Trustee, the Trustee has failed to enforce such rights. The Issuer
has no obligation to take any action under this Section.
(c) Upon
the occurrence of an Event of Default described in Section 6.1(a) hereof, the
Trustee shall immediately draw upon any Bond Insurance, Liquidity Facility or
Letter of Credit, if permitted by the terms thereof and required by the terms of
the Indenture, and apply the amount so drawn in accordance with the Indenture
and may exercise any remedy available to it thereunder.
The
provisions of clause (a) of the preceding paragraph are subject to the condition
that if, at any time after the unpaid indebtedness under Section 4.2(a) hereof
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, there shall have been deposited with the Trustee a sum
sufficient to pay all the principal of the Bonds matured prior to such
declaration and all matured installments of interest (if any) upon all the
Bonds, with interest on such overdue installments of principal as provided
herein, and the reasonable expenses of the Trustee and the Issuer, and any and
all other defaults known to the Trustee (other than in the payment of principal
of and interest on the Bonds due and payable solely by reason of such
declaration) shall have been made good or cured to the satisfaction of the
Trustee or provision deemed by the Trustee to be adequate shall have been made
therefor, then, and in every such case, the Trustee shall, on behalf of the
Owners of all the Bonds, with the consent of the Bank or the Bond Insurer, if
any (except in the event of a Bank Default or Insurer Default), rescind and
annul such declaration and its consequences and waive such default; provided
that no such rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair or exhaust any right or power consequent
thereon.
In case
the Trustee or the Issuer, as the case may be, shall have proceeded to enforce
its rights under this Agreement, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee or the Issuer, then, and in every such case, the Borrower, the
Trustee and the Issuer shall be restored respectively to their several positions
and rights hereunder, and all rights, remedies and powers of the Borrower, the
Trustee and the Issuer shall continue as though no such action had been
taken.
Any
amounts collected pursuant to action taken under this Section 6.2 shall be paid
into the Bond Fund (unless otherwise provided in this Agreement) and applied in
accordance with the provisions of the Indenture. No action taken
pursuant to this Section 6.2 shall relieve the Borrower from the Borrower’s
obligations pursuant to Section 4.2 hereof.
17
No
recourse shall be had for any claim based on this Agreement against any officer,
director or shareholder, past, present or future, of the Borrower as such,
either directly or through the Borrower, under any constitutional provision,
statute or rule of law, or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise.
Nothing
herein contained, including, without limitation, the last two paragraphs of this
Section 6.2, shall be construed to prevent the Issuer from
enforcing directly any of its rights under Section 5.1 hereof and under Sections
4.2(d), 4.2(e), 4.2(h) and 6.4 hereof.
In case
proceedings shall be pending for the bankruptcy or for the reorganization of the
Borrower under the federal bankruptcy laws or any other applicable law, or in
case a receiver or trustee shall have been appointed for the property of the
Borrower or in the case of any other similar judicial proceedings relative to
the Borrower, or the creditors or property of the Borrower, then the Trustee
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount owing and
unpaid pursuant to this Agreement and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee allowed in such judicial
proceedings relative to the Borrower, its creditors or its property, and to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute such amounts as provided in the Indenture after
the deduction of its reasonable charges and expenses. Any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized to make
such payments to the Trustee, and to pay to the Trustee any amount due if for
reasonable compensation and expenses, including reasonable expenses and fees of
counsel incurred by it up to the date of such distribution.
Anything
in this Agreement to the contrary notwithstanding, upon the occurrence and
continuance of an Event of Default while Bond Insurance is in effect, except in
the event of an Insurer Default, the Bond Insurer shall be entitled to control
and direct the enforcement of all rights and remedies granted to the Issuer, the
Bondholders or the Trustee for the benefit of the Bondholders hereunder,
including, without limitation: (i) the right to accelerate the
payment, in the manner described in subsection (a) of this Section 6.2, of the
Borrower’s indebtedness hereunder and (ii) the right to annul any
declaration of acceleration relating to the Borrower’s indebtedness hereunder,
and the Bond Insurer shall also be entitled to approve all waivers of Events of
Default hereunder.
Anything
in this Agreement to the contrary notwithstanding, upon the occurrence and
continuance of an Event of Default while a Letter of Credit is in effect, except
in the event of a Bank Default, the Bank shall be entitled to control and direct
the enforcement of all rights and remedies granted to the Issuer, the
Bondholders or the Trustee for the benefit of the Bondholders, including,
without limitation: (i) the right to accelerate the payment, in the
manner described in subsection (a) of this Section 6.2, of the Borrower’s
indebtedness hereunder and (ii) the right to annul any declaration of
acceleration relating to the Borrower’s indebtedness hereunder, and the Bank
shall also be entitled to approve all waivers of Events of Default
hereunder.
18
remedy
given under this Agreement or now or hereafter existing at law or in equity or
by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order
to entitle the Issuer or the Trustee to exercise any remedy reserved to it in
this Article, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required. Such rights and remedies
as are given the Issuer hereunder shall also extend to the Trustee and the
Owners of the Bonds, subject to the provisions of the Indenture, and the Trustee
and Owners of the Bonds shall be entitled to the benefit of all covenants and
agreements herein contained.
ARTICLE
VII
19
(b) The
prepayment payable by the Borrower hereunder upon either (i) the exercise of the
option granted to the Borrower in Section 7.1 hereof, or (ii) the fulfillment of
an obligation specified in Section 7.2 shall be, to the extent applicable and
except as otherwise provided in Article VIII of the Indenture, the sum of
the following:
(1) the
amount of money which, when added to the amount on deposit in the Bond Fund
prior to the prepayment being made and available for such purpose, will be
sufficient to provide all funds necessary to redeem the Bonds or portions
thereof designated in the notice specified in subsection (a) of this Section to
be redeemed on the date set forth in the notice, including, without limitation,
principal, premium, if any, and all interest to accrue to said redemption date
and redemption expenses; plus
(2) in
the event all of the Bonds are to be redeemed, an amount of money equal to all
Administrative Expenses and the Trustee’s, Auction Agent’s and Remarketing
Agent’s fees and expenses under the Indenture accrued and to accrue until the
final payment and redemption of the Bonds.
(c) Any
prepayment made pursuant to Section 7.1 or 7.2 hereof shall be deposited into
the Bond Fund. No prepayment or investment of the proceeds thereof
shall be made which shall cause any Bonds to be “arbitrage bonds” within the
meaning of Section 148(a) of the Code.
20
ARTICLE
VIII
ARTICLE
IX
21
security
interest in this Agreement by the Trustee, only the counterpart delivered,
pledged and assigned to the Trustee shall be deemed the original.
provided
in Section 4.2 hereof the Trustee is a party in interest and third party
beneficiary under this Agreement entitled to enforce its rights as so stated
herein as if it were a party hereto.
[REMAINDER
OF THIS PAGE INTENTIONALLY BLANK]
22
XXXXX
COUNTY, NEVADA
By: /s/ Xxxx
Xxxx
Chair,
Board of County Commissioners
(SEAL)
Attest:
/s/ Xxxxxxx X.
Xxxxxxxxxxx
County
Clerk
SOUTHWEST
GAS CORPORATION
By: /s/
Xxxxxxx X. Xxxxx
Authorized Borrower Representative
23
EXHIBIT
A-1
DESCRIPTION OF THE
PROJECT
[attached]