Exhibit 10.4
[EXECUTION COPY]
AMENDMENT NO. 2
TO
CREDIT AGREEMENT
This AMENDMENT NO. 2, dated as of June 25, 2002 (this "AMENDMENT"), is
made by and among NEVADA POWER COMPANY, a Nevada corporation (the "BORROWER"),
the banks listed on the signature pages of this Amendment as "Lenders" (such
banks, together with their respective permitted assignees from time to time,
being referred to herein, collectively, as the "LENDERS"), and UNION BANK OF
CALIFORNIA, N.A. ("UNION BANK"), as administrative agent for the Lenders (the
"ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Administrative Agent, Union
Bank, as Sole Bookrunner, Xxxxx Fargo Bank, N.A., as Syndication Agent, and Bank
One, NA, BNP Paribas and Mellon Bank, N.A., as Co-Documentation Agents,
previously entered into that certain Credit Agreement, dated as of November 30,
2001, as amended by that certain Waiver Letter and Amendment (the "WAIVER
LETTER"), dated April 4, 2002 (as so amended, the "EXISTING AGREEMENT", as
further amended by this Amendment, the "AMENDED AGREEMENT", and as the Amended
Agreement may hereafter be amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned thereto in the Existing
Agreement.
(2) As contemplated at the time of executing the Existing
Agreement, the Borrower plans to enter into a receivables purchase facility (the
"RECEIVABLES PURCHASE FACILITY") with certain financial institutions (the
"PURCHASERS"). Under the Receivables Purchase Facility, (a) the Borrower will
sell accounts receivable arising from the provision of electricity to a newly
created, wholly-owned bankruptcy remote special purpose subsidiary of the
Borrower (the "SPV") and (b) either (i) the SPV (or a newly created,
wholly-owned bankruptcy remote special purpose subsidiary of Sierra Pacific
Resources (the "PARENT SPV") to which the SPV may first sell such accounts
receivable) will sell undivided percentage ownership interests in such accounts
receivable (the "PURCHASER INTERESTS") to the Purchasers, or (ii) the Purchasers
will make advances
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("ADVANCES") to the SPV or the Parent SPV in respect of and secured by such
accounts receivable.
(3) Although it was the parties' intention that the Existing
Agreement permit the establishment of the Receivables Purchase Facility to
enhance the Borrower's liquidity and overall financial position, during the
course of preparing the documentation for the Receivables Purchase Facility, it
has become apparent that certain provisions of the Existing Agreement restrict
the capacity of the Receivables Purchase Facility to achieve those objectives.
(4) Accordingly, the Borrower now wishes to amend the Existing
Agreement to clarify that the Borrower may enter into the transactions
contemplated by the Receivables Purchase Facility. The Borrower also wishes to
amend Section 6.02 and other provisions of the Existing Agreement in certain
particulars. The Required Lenders and the Administrative Agent have agreed to
such amendments, on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. AMENDMENTS TO EXISTING AGREEMENT. The Existing Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 hereof, hereby amended as follows:
(a) NEW DEFINITIONS. The following new definitions are hereby
added to Section 1.01 in the appropriate alphabetical order:
"ADVANCES" has the meaning assigned to such term in the
definition of "Receivables Purchase Facility" contained in this Section
1.01.
"DISPOSE" has the meaning assigned to such term in Section
6.04; and the terms "DISPOSITION" and "DISPOSED" shall have correlative
meanings.
"MINIMUM ADVANCE PERCENTAGE" means, in respect of any
Receivables Purchase Facility, a percentage equal to the greater of (i)
80% less the reserves (expressed as a percentage) established under
such Receivables Purchase Facility in respect of dilutive factors with
respect to the accounts receivable Disposed of to the Purchasers
thereunder or securing Advances thereunder, as the case may be, or (ii)
70%.
"PARENT SPV" has the meaning assigned to such term in the
definition of "Receivables Purchase Facility" contained in this Section
1.01.
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"PURCHASE CONTRACT L/C" has the meaning assigned to such term
in Section 6.02(h).
"PURCHASER INTERESTS" has the meaning assigned to such term in
the definition of "Receivables Purchase Facility" contained in this
Section 1.01.
"PURCHASERS" has the meaning assigned to such term in the
definition of "Receivables Purchase Facility" contained in this Section
1.01.
"RECEIVABLES PURCHASE FACILITY" means an accounts receivable
purchase facility pursuant to which (a) the Borrower will sell accounts
receivable arising from the provision of electricity to a newly
created, wholly-owned bankruptcy remote special purpose subsidiary of
the Borrower (the "SPV") and (b) either (i) the SPV (or a newly
created, wholly-owned bankruptcy remote special purpose subsidiary of
Sierra Pacific Resources (the "PARENT SPV") to which the SPV may first
sell such accounts receivable) will sell undivided percentage ownership
interests in such accounts receivable (the "PURCHASER INTERESTS") to
the various financial institutions party to such facility (the
"PURCHASERS"), or (ii) the Purchasers will make advances ("ADVANCES")
to the SPV or the Parent SPV in respect of and secured by such accounts
receivable.
"RELATED SECURITY" means, with respect to any accounts
receivable of the Borrower, the SPV or the Parent SPV (as applicable),
(i) all Liens and property subject thereto from time to time, if any,
purporting to secure payment of such accounts receivable, whether
pursuant to the contract related to such accounts receivable or
otherwise, (ii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such accounts receivable whether
pursuant to the contract related to such accounts receivable or
otherwise, (iii) all service contracts and other contracts and
agreements associated with such accounts receivable, (iv) all books and
records related to such accounts receivable, and (v) all proceeds of
any of the foregoing.
"SPV" has the meaning assigned to such term in the definition
of "Receivables Purchase Facility" contained in this Section 1.01.
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(b) REPORTING REQUIREMENTS. Section 5.01 is hereby amended by
adding the following new subsections (k) and (l) at the end thereof:
"(k) CASH RECEIPTS AND DISBURSEMENTS. The Borrower shall
deliver to the Administrative Agent, with a copy for each Lender, on
the first Wednesday of every two-calendar-week period, a statement of
projected weekly cash receipts and cash disbursements for at least the
immediately succeeding 12-calendar-week period, together with a
comparison of the projected cash receipts and disbursements to actual
cash receipts and disbursements for the immediately preceding
two-calendar-week period, in each case in substantially the form set
forth as Exhibit E, duly completed and signed by a Responsible Officer
of the Borrower.
(l) MONTHLY FINANCIAL REPORTS. As soon as practicable,
and in any event within three Business Days, after the Borrower issues
its monthly management-prepared financial statements, the Borrower
shall deliver such financial statements to the Administrative Agent,
with a copy for each Lender."
(c) LIENS. Section 6.02 is hereby amended by:
(i) deleting the word "and" after the semicolon at the
end of subsection (f) thereof;
(ii) deleting clause (iv) contained in the proviso to
subsection (g) thereof in its entirety and substituting therefor the
following new clause (iv):
"(iv) the aggregate amount secured by all Liens described in
this Section 6.02(g) shall not at any time exceed (A)
$50,000,000 minus (B) the aggregate amount of cash, cash
equivalents, marketable securities, instruments and other
investment property held in deposit accounts, investment
accounts or otherwise with any financial and/or depository
institutions and subject to a Lien permitted under subsection
(h) below;"
(iii) deleting the period at the end of subsection (g)
thereof;
(iv) adding the following new subsection (h) immediately
after subsection (g) thereof:
"(h) Liens, including pledges, rights of offset
and bankers' liens, on deposit accounts, instruments,
investment accounts and investment property (including
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cash, cash equivalents and marketable securities) from time to
time maintained with or held by any financial and/or
depository institutions, in each case solely to secure (1) any
and all obligations of the Borrower in respect of letters of
credit issued from time to time by any such financial and/or
depository institutions (or their Affiliates) for the account
of the Borrower or any of its Subsidiaries for purposes of
supporting the Borrower's or such Subsidiary's obligations now
or hereafter owing to gas or other energy suppliers (such
letters of credit, collectively, the "PURCHASE CONTRACT
L/C'S"), or (2) any and all obligations now or hereafter
existing of the Borrower or any of its Subsidiaries in
connection with any deposit account, investment account or
cash management service (including ACH, Fedwire, CHIPS,
concentration and zero balance accounts, and controlled
disbursement, lockbox or restricted accounts) now or hereafter
provided by any financial and/or depository institutions to or
for the benefit of the Borrower, any of its Subsidiaries or
any special purpose entity directly or indirectly providing
loans to or making receivables purchases from the Borrower or
any of its Subsidiaries; PROVIDED, HOWEVER, that the aggregate
amount of cash, cash equivalents, marketable securities,
instruments and other investment property held in deposit
accounts, investment accounts or otherwise with any financial
and/or depository institutions and subject to a Lien permitted
under this Section 6.02(h) shall not at any time exceed (A)
$50,000,000 minus (B) the aggregate amount secured by Liens
described in subsection (g) above; and"
(v) adding the following new subsection (i) immediately
after the new subsection (h) thereof:
"(i) Liens in the SPV's accounts receivable and
Related Security securing the obligations of the SPV under a
Receivables Purchase Facility permitted under Section 6.04(c)
(including, without limitation, the SPV's obligation to repay
Advances made thereunder)."
and
(vi) deleting the phrase "to secure any obligations now or
hereafter owing to such power and/or commodity trading counterparties
or power suppliers" contained in the penultimate sentence of Section
6.02 in its entirety and substituting therefor the new phrase "to
secure any obligations now or hereafter owing to
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such power and/or commodity trading counterparties or power suppliers;
PROVIDED, that, for the avoidance of doubt, this sentence shall not
prohibit any Liens permitted under Section 6.02(h)(1) securing
obligations of the Borrower in respect of Purchase Contract L/C's".
(d) DISPOSITIONS OF PROPERTIES. Section 6.04 is hereby amended in
its entirety to read as follows:
"SECTION 6.04 Dispositions of Properties.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, sell, convey, assign, lease, sale-leaseback, transfer,
abandon or otherwise dispose of, voluntarily or involuntarily
(collectively, "DISPOSE"), any of its Properties, or agree, become or
remain liable contingently or otherwise to do any of the foregoing,
except that, so long as no Default or Event of Default shall have
occurred and be continuing or shall exist at such time or after giving
effect to such transaction, the Borrower and its Subsidiaries may
Dispose of Property (a) in transactions in the ordinary course of
business consistent with past practice, (b) that is obsolete, (c)
comprising accounts receivable and Related Security transferred from
time to time on a revolving basis to the SPV, the Parent SPV, a
commercial paper conduit or other purchaser pursuant to a Receivables
Purchase Facility; PROVIDED that (i) the outstanding amount of capital
associated with the Purchaser Interests that are Disposed of, or the
outstanding amount of Advances made in respect of such Disposed
accounts receivable, as the case may be, pursuant to all Receivables
Purchase Facilities does not exceed $125,000,000 in the aggregate as of
any date of determination, and (ii) the aggregate net cash proceeds
received by the Borrower for all Dispositions of accounts receivable
and Related Security made pursuant to, or in connection with,
Receivables Purchase Facilities are not less than the Minimum Advance
Percentage of the aggregate amount of accounts receivable Disposed of
in all such Dispositions; PROVIDED, HOWEVER, that, notwithstanding the
foregoing, upon the occurrence and during the continuance of a Default
or an Event of Default, the Borrower and its Subsidiaries may continue
to Dispose of accounts receivable and Related Security pursuant to this
clause (c) if (and only if) (A) the conditions set forth in clauses (i)
and (ii) above are satisfied at the time of each such Disposition and
(B) the cash proceeds received by the Borrower for each such
Disposition are applied immediately as a prepayment of the Loans
pursuant to Section 2.08(b); PROVIDED, FURTHER, that each Disposition
made by the Borrower in reliance on this clause (c) shall constitute a
representation and warranty of the Borrower, made at the time of such
Disposition, that the conditions set forth in clauses (i) and (ii)
above are satisfied at such time, and (d) in transactions other than as
provided in Section 6.04(a), (b) and (c); PROVIDED that the aggregate
book
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value of all Property Disposed of pursuant to this Section 6.04(d) from
and after the date hereof shall not exceed $50,000,000."
(e) DIVIDENDS AND STOCK REPURCHASES. Section 6.06 is hereby
amended in its entirety to read as follows:
"SECTION 6.06 DIVIDENDS AND STOCK REPURCHASES.
The Borrower shall not declare or pay, directly or indirectly,
any dividend, payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any share of any
class of capital stock of the Borrower (except for dividends in the
form of capital stock), or purchase, redeem, retire, or otherwise
acquire for value any shares of any class of capital stock of the
Borrower or any warrants, rights, or options to acquire any such
shares, now or hereafter outstanding, or make any distribution of
assets to any of its shareholders."
(f) EQUAL AND RATABLE LIEN. Section 6.09(a) is hereby amended by
deleting the period at the end of the first sentence thereof and inserting in
lieu thereof the following:
"; PROVIDED, HOWEVER, that, subject to Section 2.15(d), no issuer of a
Purchase Contract L/C shall be required to share with the Lenders any
collateral granted to such issuer pursuant to Section 6.02(h)(1) if (i)
such issuer received from the Borrower at the time of the issuance of
such Purchase Contract L/C a written representation and warranty
confirming the Borrower's compliance with the provisions of Section
6.02(h) in connection therewith and (ii) such issuer had no actual
knowledge at the time of such issuance that the Lien granted by the
Borrower or any of its Subsidiaries (as the case may be) in such
collateral constituted a violation of Section 6.02."
(g) RESTRICTIVE AGREEMENTS. Section 6.10(a) is hereby amended by
deleting the phrase "the Borrower or any of its Subsidiaries to create" in its
entirety and substituting therefor the new phrase "the Borrower or any of its
Subsidiaries (other than the SPV and/or the Parent SPV in connection with a
Receivables Purchase Facility) to create".
(h) PREPAYMENTS AND REDEMPTION OF INDEBTEDNESS. Article VI is
hereby amended by adding the following new Section 6.11 at the end thereof:
"SECTION 6.11 PREPAYMENTS AND REDEMPTION OF INDEBTEDNESS.
The Borrower shall not purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking,
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defeasance or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or
prepayment of the principal of or interest on, or any other amount
owing in respect of, any of its Indebtedness (other than Indebtedness
hereunder and under the other Loan Documents), except that (i) the
Borrower may make payments on the regularly-scheduled payment dates
with respect to the principal of and interest on its Indebtedness, (ii)
the Borrower may reimburse the issuer of any letter of credit or
similar instrument issued for the account of the Borrower (in each case
to the extent such letter of credit or similar instrument is permitted
to be issued for the account of the Borrower pursuant to the terms of
this Agreement) for any drawings made thereunder, together with any
interest and fees related thereto, at the times required under any
reimbursement agreement or similar agreement to which the Borrower is a
party, and (iii) for the avoidance of doubt, this Section 6.11 shall
not prohibit any payments or prepayments of amounts payable (including,
without limitation, deferred amounts payable) (other than for borrowed
money) to the Borrower's gas and power suppliers arising in the
ordinary course of business."
(i) NEW EXHIBIT. Exhibit E attached hereto is hereby deemed to
constitute Exhibit E to the Credit Agreement.
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective (a) with respect Sections 1(c)(v), 1(d) and 1(g) hereof, as of July 5,
2002, and (b) with respect to all other provisions contained in Section 1
hereof, as of the date first above written, when, and only when, the
Administrative Agent shall have received: (i) counterparts of this Amendment
executed by the Borrower, the Administrative Agent and the Required Lenders,
(ii) for the account of each Lender that delivers an executed counterpart of
this Amendment on or before June 25, 2002, a nonrefundable amendment fee of
0.30% of such Lender's Commitment, in immediately available funds, and (iii) all
of the following documents, each document being dated the date of receipt
thereof by the Administrative Agent (which date shall be the same for all such
documents), in form and substance satisfactory to the Administrative Agent:
(A) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names, true signatures and
incumbency of the officers of the Borrower authorized to sign this
Amendment and any other documents to be delivered hereunder.
(B) A certificate of a Responsible Officer of the
Borrower (the statements in which shall be true) stating that (1) after
giving effect to the Waiver Letter, except as disclosed by Sierra
Pacific Resources in its press release issued on June 11, 2002, the
representations and warranties set
9
forth in Article III of the Existing Agreement are true and correct on
and as of the date hereof, both before and after giving effect to this
Amendment, as though made on and as of such date, and (2) after giving
effect to this Amendment, no event has occurred and is continuing that
constitutes a Default or an Event of Default, and no Default or Event
of Default would result from the execution, delivery or performance of
this Amendment or the transactions contemplated hereby.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:
(a) The execution and delivery by the Borrower of this Amendment,
and the performance by the Borrower of this Amendment and the Amended Agreement,
(i) are within the Borrower's corporate powers, (ii) have been duly authorized
by all necessary corporate action, and (iii) do not and will not (A) require any
consent or approval of the shareholder of the Borrower (other than any such
consent or approval that has been duly obtained and is in full force and
effect), (B) violate any provision of the articles of incorporation or by-laws
of the Borrower or of law, (C) violate any legal restriction binding on or
affecting the Borrower, (D) result in a breach of, or constitute a default
under, any indenture or loan or credit agreement or any other agreement, lease
or instrument to which the Borrower is a party or by which it or its properties
may be bound or affected, or (E) result in or require the creation of any Lien
(other than pursuant to the Loan Documents) upon or with respect to any of its
properties. This Amendment has been duly executed and delivered by the Borrower.
(b) No Governmental Action is required for (i) the due execution
and delivery by the Borrower of this Amendment or (ii) the performance by the
Borrower of this Amendment and the Amended Agreement, other than any such
Governmental Actions that have been duly obtained or made and are in full force
and effect on the date hereof.
(c) Each of this Amendment and the Amended Agreement is the legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) Except as disclosed by the Borrower in its reports filed with
the Securities and Exchange Commission prior to the date hereof, there is no
pending or, to the knowledge of the Borrower, threatened action, suit,
investigation, litigation or proceeding affecting the Borrower or any of its
properties before any court, governmental agency or arbitrator, that would
reasonably be expected to materially adversely affect the legality, validity, or
enforceability of, or the ability
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of the Borrower to perform its obligations under, this Amendment or the Amended
Agreement.
SECTION 4. REFERENCE TO AND EFFECT ON THE EXISTING AGREEMENT. (a) Upon
the effectiveness of this Amendment: (i) each reference in the Existing
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Existing Agreement shall mean and be a reference to the Amended
Agreement; and (ii) each reference in any other Loan Document to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Existing Agreement shall mean and be a reference to the Amended Agreement.
(b) Except as specifically amended above, the Existing Agreement
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lenders or the Administrative Agent under the
Existing Agreement or any other Loan Document, nor constitute a waiver of any
provision of the Existing Agreement or any other Loan Document.
SECTION 5. COSTS AND EXPENSES. The Borrower agrees to pay on demand (i)
all reasonable costs and expenses of the Administrative Agent in connection with
the preparation, negotiation, syndication, execution, delivery, administration
and performance of this Amendment, the Amended Agreement, the other Loan
Documents and the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
(A) counsel to the Administrative Agent with respect thereto and with respect to
advising the Administrative Agent as to its rights and responsibilities
hereunder and thereunder, and (B) any other consultants or experts that the
Administrative Agent reasonably deems necessary or advisable in connection with
the foregoing, and (ii) all costs and expenses of the Administrative Agent and
each Lender (including, without limitation, reasonable fees and expenses of (A)
counsel to the Administrative Agent and counsel for each Lender and (B) any
other consultants or experts deemed necessary or advisable by the Administrative
Agent) in connection with the enforcement or preservation of rights (whether
through negotiations, legal proceedings or otherwise) under this Amendment, the
Amended Agreement or any other Loan Document.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. In furtherance of the foregoing, it is understood and agreed
that signatures hereto submitted by facsimile transmission shall be deemed to
be, and shall constitute, original signatures.
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SECTION 7. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of the New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S-1
IN WITNESS WHEREOF, the parties hereto have caused Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
NEVADA POWER COMPANY
By
-----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent
By
-----------------------------------
Name:
Title:
Signature Page to Amendment No. 2 to NPC Credit Agreement
S-2
LENDERS
-------
UNION BANK OF CALIFORNIA, N.A.
By
-----------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.
By
-----------------------------------
Name:
Title:
BANK ONE, NA
By
-----------------------------------
Name:
Title:
BNP PARIBAS
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
MELLON BANK, N.A.
By
-----------------------------------
Name:
Title:
Signature Page to Amendment No. 2 to NPC Credit Agreement
S-3
BAYERISCHE LANDESBANK
GIROZENTRALE
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
MIZUHO CORPORATE BANK, LTD., formerly
known as The Industrial Bank of
Japan, Limited
By
-----------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC.
By
-----------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
formerly known as First Union
National Bank
By
-----------------------------------
Name:
Title:
Signature Page to Amendment No. 2 to NPC Credit Agreement
S-4
XXXXXXX XXXXX BANK USA
By
-----------------------------------
Name:
Title:
Signature Page to Amendment No. 2 to NPC Credit Agreement
EXHIBIT E
---------
PROJECTED/ACTUAL CASH FLOWS
[ table ]
