[EXECUTION COPY]
Exhibit 10.1
WAIVER LETTER AND AMENDMENT
April 4, 2002
Nevada Power Company
x/x Xxxxxx Xxxxxxx Xxxxxxxxx
0000 Xxxx Xxxx
X.X.Xxx 00000
Xxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Re: $200,000,000 Nevada Power Company Credit Facility
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Reference is hereby made to the Credit Agreement, dated as of November 30,
2001, among Nevada Power Company ("NPC" or the "Borrower"), Union Bank of
California, N.A., as Sole Bookrunner and Administrative Agent, Xxxxx Fargo Bank,
N.A., as Syndication Agent, Bank One, NA, BNP Paribas and Mellon Bank, N.A., as
Co-Documentation Agents, and the Lenders party thereto from time to time (the
"NPC Credit Agreement"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings set forth in the NPC Credit Agreement.
As a result of NPC's recent rate case decisions by the Public Utilities
Commission of Nevada ("PUCN") rendered in response to certain rate increase and
deferred energy expense recovery requests made by NPC, the downgrading of the
Index Debt and other circumstances that have occurred prior to the date hereof
(collectively, the "MAC Event"), the Required Lenders have determined, and NPC
agrees and acknowledges, that there has occurred (i) an event, act or
circumstance that would reasonably be expected to have a Material Adverse Effect
and/or (ii) a material adverse change in the business, operations, condition
(financial or otherwise), or prospects of NPC and its Subsidiaries, taken as a
whole (clauses (i) and (ii) being hereinafter referred to, collectively, as the
"Material Adverse Change"). As a result of the MAC Event, NPC is presently
unable to satisfy certain conditions precedent to the receipt of Loans under the
NPC Credit Agreement, including those specified at Sections 4.02(b) (including
by virtue of Section 3.09) and 4.02(e) thereof (such conditions precedent being
referred to herein, collectively, as the "MAC Condition").
The Required Lenders have agreed to waive the MAC Condition to the extent
of the MAC Event solely for purposes of any Borrowing, conversion or
continuation of Loans now or hereafter requested under the NPC Credit Agreement,
such waiver to become effective only
upon the delivery to NPC by the Administrative Agent on or before April 4, 2002
of written notice stating that all of the following conditions precedent have
been satisfied (and, in the case of any amendments to the NPC Credit Agreement
set forth below, that this Waiver Letter and Amendment (this "Letter Agreement")
has been executed and delivered by NPC and the Required Lenders) or waived in
writing by the Required Lenders:
(1) NPC and the Required Lenders agree that Section 9.10 of the NPC Credit
Agreement is hereby amended by adding the following sentence at the end
thereof: "Notwithstanding the foregoing, no Lender may exercise any right
of set-off pursuant to this Section or under applicable law and apply such
set-off to any portion of the Obligations without the prior written consent
of the Required Lenders."
(2) The original General and Refunding Mortgage Bond(s), and copies of all
other documents, required to be delivered under Sections 4.01(p) and
6.09(b) of the NPC Credit Agreement in connection with the issuance of the
General and Refunding Mortgage Bonds (the "Bond Documents") shall have been
executed and delivered to the Administrative Agent and shall be in form and
substance satisfactory to the Required Lenders; provided, that the pledge
agreement referenced in Section 4.01(p) shall not be delivered or shall be
modified to the satisfaction of the Administrative Agent and the Required
Lenders to eliminate the pledge of the General and Refunding Mortgage
Bonds, it being the intent of the parties that the bonds being so issued
shall for all purposes be deemed presently, unconditionally and
definitively issued to the Administrative Agent, for the benefit of the
Lenders, as a registered holder, and not subject to any pledge.
(3) NPC and the Required Lenders agree that Section 6.02 of the NPC Credit
Agreement is hereby amended by adding the following sentence at the end
thereof: "Notwithstanding the foregoing, the Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time create, incur, assume or
suffer to exist any Lien on any of its Properties (now owned or hereafter
acquired) in favor of its power and/or commodity trading counterparties or
power suppliers to secure any obligations now or hereafter owing to such
power and/or commodity trading counterparties or power suppliers. The
Borrower shall not issue any additional First Mortgage Bonds pursuant to
the First Mortgage Indenture on or after April 4, 2002."
(4) NPC and the Required Lenders agree that Section 9.12(c)(i) of the NPC
Credit Agreement is hereby amended by deleting the phrase "the Borrower (so
long as no Default or Event of Default shall have occurred and be
continuing) and".
(5) NPC and the Required Lenders agree that Section 2.01 of the NPC Credit
Agreement is hereby amended by adding the following sentence at the end
thereof: "Notwithstanding anything to the contrary contained herein, the
sum of (i) the aggregate outstanding amount of commercial paper notes
issued by the
Borrower and (ii) the aggregate outstanding principal amount of Loans under
this Agreement shall not exceed $200,000,000 at any time."
(6) NPC and the Required Lenders agree that Section 2.06 of the NPC Credit
Agreement is hereby amended by adding the following new subsection (g) at
the end thereof:
"(g) MANDATORY COMMITMENT REDUCTION. In the event that the Borrower
issues or causes to be issued after April 4, 2002 General and
Refunding Mortgage Bonds (other than General and Refunding Mortgage
Bonds in the aggregate principal amount not exceeding $130,000,000 to
secure 6.20% Senior Unsecured Notes, Series B due April 15, 2004
issued by the Borrower) in an aggregate cumulative principal amount in
excess of $250,000,000, (i) the Borrower shall immediately and from
time to time upon any such issuance pay principal in an amount equal
to such excess to the Administrative Agent to be applied as a
mandatory prepayment of the Loans, together with accrued interest
thereon and any amount owing under Section 2.13, and (ii) the
Commitments shall be immediately and permanently reduced by the amount
of such excess."
(7) NPC agrees to pay to the Administrative Agent and the Lenders upon
demand all of the expenses (including, without limitation, reasonable fees
and disbursements of counsel) incurred by the Administrative Agent and the
Lenders in connection with this Letter Agreement in accordance with Section
9.04 of the NPC Credit Agreement.
(8) As previously offered by Sierra Pacific Resources ("SPR"), the SPR
Credit Agreement, and all "Commitments" thereunder, shall be irrevocably
terminated by SPR pursuant to the terms thereof and all amounts payable
thereunder shall be paid in full.
(9) NPC agrees to cause its counsel to deliver to the Administrative Agent
within five Business Days after the date hereof, legal opinions in form and
substance satisfactory to the Administrative Agent and its counsel with
respect to this Letter Agreement and the issuance of the Bond Documents.
(10) NPC shall have delivered to the Administrative Agent satisfactory
written evidence of authority to execute and deliver this Letter Agreement.
By its execution of this Letter Agreement, NPC acknowledges and agrees that
the Material Adverse Change has occurred and that it cannot satisfy the MAC
Condition, and that the Lenders have no obligation to lend or permit conversions
or continuations under the NPC Credit Agreement. NPC acknowledges by its
execution of this Letter Agreement that the Required Lenders will waive the MAC
Condition and allow NPC to obtain, convert and continue Loans, subject to the
terms and conditions of the NPC Credit Agreement, solely in consideration of the
contemporaneous delivery of the Bond Documents and the satisfaction of the other
conditions set forth above. The contemporaneous satisfaction of each of the
conditions above is a material inducement to the provision of this waiver.
Without limitation of the definition of "Material Adverse Change" contained
herein, NPC acknowledges and agrees that any material adverse change to the pro
forma financial information heretofore delivered by NPC to the Lenders and set
forth in Exhibit A attached hereto shall constitute a material adverse change in
the business, operations, condition (financial or otherwise), or prospects of
NPC and its Subsidiaries, taken as a whole.
With respect to any Borrowing Request made by NPC on the date hereof, the
Required Lenders hereby waive the prior day notice requirements set forth in
Section 4.02 of the NPC Credit Agreement and agree to allow the same day notice
for such borrowing.
The parties hereto agree and acknowledge that this Letter Agreement
satisfies the notice requirement under Section 5.01(f) of the NPC Credit
Agreement with respect to the MAC Event.
The waiver of the MAC Condition set forth herein is limited as specified
herein and shall not constitute a modification, acceptance or waiver of, or
consent to, any other provision of the NPC Credit Agreement other than as
specified herein. In particular, except as expressly set forth herein, this
Letter Agreement shall not operate as a waiver by the Lenders of their right to
declare that any condition precedent to borrowing under the NPC Credit Agreement
(other than the MAC Condition) has not been satisfied or that a Material Adverse
Change (other than the MAC Event) has occurred.
Except as expressly provided herein, this Letter Agreement shall not limit
or otherwise adversely affect any right, power or remedy of the Lenders or the
Administrative Agent under the NPC Credit Agreement or any other Loan Document.
The Lenders and the Administrative Agent reserve the right to insist on strict
compliance with the terms of the NPC Credit Agreement and the other Loan
Documents, and NPC expressly acknowledges such reservation of rights. The grant
of the waiver set forth herein will not, either alone or taken with other
waivers of provisions of the NPC Credit Agreement or any other Loan Document, be
deemed to create or be evidence of a course of conduct. Any future or additional
waiver of any provision of the NPC Credit Agreement or any other Loan Document
shall be effective only if set forth in a writing separate and distinct from
this Letter Agreement and executed by the appropriate parties.
Upon the effectiveness of this Letter Agreement, each reference in the NPC
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the NPC Credit Agreement shall mean and be reference to the
NPC Credit Agreement, as amended by this Letter Agreement.
This Letter Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York. This Letter Agreement may be executed
in any number of counterparts, each of which shall be an original and all of
which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this Letter Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.
This Letter Agreement may be amended solely by an instrument in writing executed
by NPC, the Administrative Agent and the Required Lenders. NPC acknowledges that
the purpose of this Letter Agreement, among other things, is to preserve the
rights of the Lenders under the NPC Credit Agreement.
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and as a Lender
By:
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Name:
Title
XXXXX FARGO BANK, N.A., as a Lender
By:
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Name:
Title:
BANK ONE, NA, as a Lender
By:
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Name:
Title:
BNP PARIBAS, as a Lender
By:
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Name:
Title:
By:
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Name:
Title:
MELLON BANK, N.A., as a Lender
By:
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Name:
Title:
BAYERISCHE LANDESBANK GIROZENTRALE,
as a Lender
By:
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Name:
Title:
By:
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Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Lender
By:
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Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as a Lender
By:
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Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
formerly known as First Union National
Bank, as a Lender
By:
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Name:
Title:
XXXXXXX XXXXX BANK USA, as a Lender
By:
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Name:
Title:
Agreed and Acknowledged:
NEVADA POWER COMPANY
By:
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Name:
Title:
