SECOND AMENDMENT TO TRANSACTION DOCUMENTS
THIS SECOND AMENDMENT TO TRANSACTION DOCUMENTS (herein called this
"AMENDMENT") made as of the 9th day of November, 1994 by and among
SOUTHWESTERN PUBLIC SERVICE COMPANY (the "SUPPLIER"), CAP ROCK ELECTRIC
COOPERATIVE, INC. (the "USER"), OTP, INC. (the "ISSUER"), METROPOLITAN LIFE
INSURANCE COMPANY, METROPOLITAN INSURANCE AND ANNUITY COMPANY AND METROPOLITAN
PROPERTY AND CASUALTY COMPANY (collectively, the "PURCHASER"), and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as the Indenture Trustee (the "INDENTURE
TRUSTEE"), in its individual capacity only to the extent expressly stated
herein and otherwise not in its individual capacity but solely as the
Indenture Trustee under the Trust Indenture.
W I T N E S S E T H:
WHEREAS, the Supplier, the User, the Issuer, the Purchaser and the
Indenture Trustee have entered into that certain Transaction Agreement dated
as of September 9, 1993 and the other Transaction Documents, as amended by
that certain First Amendment to Transaction Documents dated as of June 24,
1994 (as so amended, collectively, the "ORIGINAL DOCUMENTS") to finance the
construction of the New Equipment and the Existing Equipment and the sale of
electric power and energy as therein expressed; and
WHEREAS, the Supplier, the User, the Issuer, the Purchaser and the
Indenture Trustee desire to amend the Original Documents to provide for the
issuance of the Issuer's 8.44% senior secured notes;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Documents, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
Section 1.1. TERMS USED IN THIS AMENDMENT. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Documents shall have the same meanings whenever used
in this Amendment. Unless the context otherwise requires, the following terms
when used in this Amendment shall have the meanings assigned to them in this
Section 1.1.
"AMENDMENT" means this Second Amendment to Transaction
Documents.
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"TRANSACTION DOCUMENTS" means the Original Documents as
amended hereby.
Section 1.2. AMENDMENTS TO DEFINED TERMS.
(a) The following paragraph is hereby added to Appendix A to
the Transaction Agreement, the Note Purchase Agreement, the Receivables
Purchase Agreement, the Trust Indenture and the Transmission Agreement
immediately preceding the definition of "Adjustment Factor":
"Unless the context otherwise requires or unless otherwise
provided in a Transaction Document the terms defined herein which refer
to a particular agreement, instrument or document also refer to and
include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that
nothing contained in this paragraph shall be construed to authorize any
such renewal, extension, modification, amendment or restatement."
(b) The definition of "Note Allocation" in Appendix A to the
Transaction Agreement, the Note Purchase Agreement, the Receivables Purchase
Agreement, the Trust Indenture and the Transmission Agreement is hereby
amended in its entirety to read as follows:
"NOTE ALLOCATION" shall mean (a) with respect to the Northern Segment,
the lesser of the amount advanced from the Construction Fund for the
purchase thereof or the outstanding principal balance of the Notes on
the date such Segment is conveyed to the Supplier, (b) with respect to
the Southern Segment, the lesser of the amount advanced from the
Construction Fund for the purchase thereof or the outstanding principal
balance of the Notes on the date such Segment is conveyed to the
Supplier, (c) with respect to the Final Segment, the lesser of the
amount advanced from the Construction Fund for the purchase thereof or
the outstanding principal balance of the Notes on the date such Segment
is conveyed to the Supplier; provided that if the Supplier, Issuer and
User shall have mutually agreed to bifurcate the Final Segment into the
East Segment and the Lone Wolf Segment, "NOTE ALLOCATION" shall mean
with respect to the East Segment, the lesser of the amount advanced
from the Construction Fund for the purchase thereof or the outstanding
principal balance of the Notes on the date such Segment is conveyed to
the Supplier, and with respect to the Lone Wolf Segment, the lesser of
the amount advanced from the Construction Fund for the purchase thereof
or the outstanding principal balance of the Notes on the date such
Segment is conveyed to the Supplier, provided that the aggregate amount
allocated to all such Segments shall not exceed $44,000,000."
(c) The definition of "Closing" or "Date of Closing" in
Appendix A to the Transaction Agreement, the Note Purchase Agreement, the
Receivables Purchase Agreement, the Trust Indenture and the Transmission
Agreement is hereby amended in its entirety to read as follows:
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"CLOSING" or "DATE OF CLOSING" shall mean either the 1993 Date of
Closing or the 1994 Date of Closing, as applicable."
(d) The following definitions of "1993 Date of Closing" and
"1994 Date of Closing" are hereby added to Appendix A to the Transaction
Agreement, the Note Purchase Agreement, the Receivables Purchase Agreement,
the Trust Indenture and the Transmission Agreement, immediately following the
definition of "New Equipment":
"1993 DATE OF CLOSING" shall mean September 9, 1993 or any other date
on or before September 15, 1993 upon which the Supplier, the User, the
Issuer, the Purchaser and the Indenture Trustee may mutually agree.
"1994 DATE OF CLOSING" shall mean November 9,1994 or any other date on
or before December 19,1994 upon which the Supplier, the User, the
Issuer, the Purchaser and the Indenture Trustee may mutually agree."
(e) The following definitions of "1993 Notes" and "1994
Notes" are hereby added to Appendix A to the Transaction Agreement, the Note
Purchase Agreement, the Receivables Purchase Agreement, the Trust Indenture
and the Transmission Agreement, immediately following the definition of "1994
Date of Closing":
"1993 NOTES" has the meaning given it in Paragraph 2(a) of the Note
Purchase Agreement.
"1994 NOTES" has the meaning given it in Paragraph 2(b) of the Note
Purchase Agreement."
(f) The definition of "Reference Rate" in Appendix A to the
Transaction Agreement, the Note Purchase Agreement, the Receivables Purchase
Agreement, the Trust Indenture and the Transmission Agreement is hereby
amended in its entirety to read as follows:
"REFERENCE RATE" shall mean, (a) 6.44% per annum, with respect to the
1993 Notes, and (b) 8.44% per annum, with respect to the 1994 Notes;
provided that in the event either (i) Xxxxx'x reduces its credit rating
of the Supplier's first mortgage bonds to A2 or below, or (ii) S&P
reduces its credit rating of the Supplier's first mortgage bonds to A
or below within 270 days following the closing of the first El Paso
Transaction, if any, and such reduction in credit rating is due in
whole or in part to the closing of such El Paso Transaction, then the
Reference Rate will automatically increase to (a) 6.59% per annum, with
respect to the 1993 Notes, and (b) 8.59% per annum, with respect to the
1994 Notes, effective as of the first day of the first month following
such credit rating reduction and provided further that there shall be
no more than one such increase in the Reference Rate."
ARTICLE II.
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AMENDMENTS TO NOTE PURCHASE AGREEMENT
Section 2.1. NOTE PURCHASE AGREEMENT - PARAGRAPH 1. The reference to
"$31,000,000" in the fourth line of Paragraph 1 of the Note Purchase Agreement
is hereby amended to read "$44,000,00".
Section 2.2. NOTE PURCHASE AGREEMENT - PARAGRAPH 2. Paragraph 2 of the
Note Purchase Agreement is hereby amended in its entirety to read as follows:
"2. PURCHASE AND SALE OF NOTES.
(a) 1993 NOTES. The Issuer has sold to the Note
Purchaser on the 1993 Date of Closing and, subject to
the terms and conditions herein set forth, the Note
Purchaser has purchased from the Issuer, Notes in the
principal amounts set forth in Schedule 1 attached
hereto (the "1993 Notes"). The Issuer has delivered to
each Note Purchaser at its address set forth in Schedule
1 attached hereto, one or more 1993 Notes registered in
the name of such Note Purchaser, evidencing the
aggregate principal amount of 1993 Notes purchased by
the Note Purchaser and in the denomination or
denominations specified by the Note Purchaser, against
payment of the purchase price thereof by transfer of
immediately available funds for credit to the
Construction Account on the 1993 Date of Closing.
(b) 1994 NOTES. The Issuer hereby agrees to sell to
the Note Purchaser and, subject to the terms and
conditions herein set forth, the Note Purchaser agrees
to purchase from the Issuer, Notes in the principal
amounts set forth in Schedule 1 attached hereto (the
"1994 Notes"). The Issuer will deliver to each Note
Purchaser at its address set forth in Schedule 1
attached hereto, one or more 1994 Notes registered in
the name of such Note Purchaser, evidencing the
aggregate principal amount of 1994 Notes to be purchased
by the Note Purchaser and in the denomination or
denominations specified by the Note Purchaser, against
payment of the purchase price thereof by transfer of
immediately available funds for credit to the
Construction Account on the 1994 Date of Closing."
Section 2.3. NOTE PURCHASE AGREEMENT - PARAGRAPH 4C. Paragraph 4C(i)
of the Note Purchase Agreement is hereby amended in its entirety to read as
follows:
"(i) As provided in each Note, on the ninth day of
each calendar month, commencing on (a) October 9, 1993,
with respect to the 1993 Notes, and (b) December 9,
1994, with respect to the 1994 Notes, and continuing
through September 9, 2003, the Issuer shall pay the
principal and interest on each Note as set forth on
Schedule 1 to such Note, without any Yield-Maintenance
Amount;"
Section 2.4. NOTE PURCHASE AGREEMENT - SCHEDULE 1; EXHIBIT A. Schedule
1 to the Note Purchase Agreement is hereby amended by in its entirety as set
forth in Appendix
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A attached hereto. Exhibit A to the Note Purchase Agreement is hereby amended in
its entirety to read as set forth in Appendix B attached hereto.
ARTICLE III.
AMENDMENTS TO TRANSACTION AGREEMENT
Section 3.1. TRANSACTION AGREEMENT -- SECTION 2.1(a). Section 2.1(a) of
the Transaction Agreement is hereby amended in its entirety to read as follows:
"(a) THE PURCHASER. The Purchaser will, subject to the terms
and conditions set forth herein and in the Note Purchase Agreement in
the form of Exhibit B attached hereto, purchase Notes issued by the
Issuer pursuant to the Note Purchase Agreement in an amount not to
exceed $44,000,000. In addition, the Purchaser will, subject to the
terms and conditions set forth herein and in the Receivables Purchase
Agreement in the form of Exhibit C attached hereto, purchase from the
Supplier the Receivables owed by the User under the Transmission
Agreement in an amount not to exceed $49,000,000; provided that at the
time each Receivable is purchased, the outstanding principal balance of
the Notes is reduced by an amount equal to the purchase price for such
Receivable."
Section 3.2. TRANSACTION AGREEMENT -- SECTION 3.3. Each reference in
Section 3.3 of the Transaction Agreement to "Date of Closing" is hereby amended
to read "1993 Date of Closing".
Section 3.3. TRANSACTION AGREEMENT -- SECTION 3.13. Section 3.13 of the
Transaction Agreement is hereby amended in its entirety to read as follows:
"Section 3.13. DATE OF CLOSING. The 1993 Date of Closing shall
occur on September 9, 1993 or such later date prior to September 15,
1993 as agreed to by the parties hereto. The 1994 Date of Closing shall
occur on November 9, 1994 or such later date prior to December 19, 1994
as agreed to by the parties hereto."
ARTICLE IV.
AMENDMENTS TO TRUST INDENTURE
Section 4.1. TRUST INDENTURE -- SECTION 4.03. Section 4.03 to the Trust
Indenture is hereby amended in its entirety to read as follows:
"SECTION 4.03. DISTRIBUTION FROM CONSTRUCTION ACCOUNT. The
Trustee shall distribute funds from the Construction Account to the
Issuer upon receipt (by telecopy or mail) of a Request for Distribution
in the form of Exhibit C hereto signed by the Issuer and the User,
together with a list of invoices paid or to be paid with such
distribution, identifying the payee, invoice number and dollar
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amount and specific descriptions of equipment and other property
constituting the Facility; provided that no distributions shall be
made from the Construction Account upon the occurrence and during the
continuance of an Event of Default or in the event an environmental
or other material claim against the Issuer has been raised by any
Person in any legal proceeding. The Issuer shall also provide a copy
of the Request for Distribution and the list of invoices to be
attached to such request to each of the Purchaser and the Supplier.
At the time of the final distribution of Note Proceeds from the
Construction Account, all accrued interest shall be distributed to
the Issuer, which hereby agrees to use such amounts for the payment
of construction costs or, if all construction costs have been paid,
for payment on the Notes and Receivables."
Section 4.2. TRUST INDENTURE -- EXHIBIT C. Exhibit C to the Trust
Indenture is hereby amended in its entirety to read as set forth in Appendix C
attached hereto.
ARTICLE V.
AMENDMENTS TO GUARANTIES
Section 5.1. SUPPLIER'S GUARANTEE -- RECITAL. The reference to the
amount of "$31,000,000" in the first Whereas clause of the Supplier's Guaranty
shall be amended to read "$44,000,000".
Section 5.2. SUPPLIER'S GUARANTEE -- GLOBAL. All references in the
Supplier's Guaranty to "Notes" shall be expressly deemed to refer to both the
1993 Notes and the 1994 Notes.
Section 5.3. USER'S GUARANTEE -- RECITAL. The reference to the amount
of "$31,000,000" in the first Whereas clause of the User's Guaranty shall be
amended to read "$44,000,000".
Section 5.4. USER'S GUARANTEE -- GLOBAL. All references in the
Supplier's Guaranty to "Notes" shall be expressly deemed to refer to both the
1993 Notes and the 1994 Notes.
ARTICLE VI.
CONDITIONS OF EFFECTIVENESS
Section 6.1. EFFECTIVE DATE. This Amendment shall become effective as
of the date first above written when and only when (i) the Purchaser shall have
received, at the offices of Xxxxxxxx & Xxxxxx, a Professional Corporation, 0000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx or at such other time and place as the
parties hereto shall agree, a counterpart of this Amendment executed and
delivered by each of the parties hereto and (ii) the Purchaser shall have
additionally received all of the following documents, each document (unless
otherwise indicated) being dated the date of receipt thereof by the Purchaser,
duly authorized, executed and delivered, and in form and substance satisfactory
to the Purchaser:
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(a) OPINIONS OF COUNSEL FOR THE TRANSACTION PARTIES. Written
opinions addressed to the Purchaser from (i) Xxxxxx, Cox, Xxxxx,
Xxxxxxxx & Xxxxxxx, special counsel for the Supplier, (ii) Xxxxxx &
Xxxxxxxxx, P.C., special counsel for the Issuer and the User, (iii)
Xxxxx, Xxxxxxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx, P.C., special Texas
regulatory counsel for the Issuer and the User, and (iv) XxXxxxx &
Xxxx, P.C., counsel for the Issuer and the User, each dated as of the
date hereof and in the respective forms of Appendices D-1, D-2, D-3 and
D-4 attached hereto;
(b) TRANSACTION PARTIES' CERTIFICATES. A certificate of a duly
authorized officer and the Secretary of each of the Transaction Parties
(i) to the effect that all of the representations and warranties of
such Transaction Party set forth in Article VII hereof are true and
correct at and as of the time of such effectiveness, and (ii)
certifying that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of such Transaction Party
authorizing the execution, delivery and performance of this Amendment
and certifying the names and true signatures of the officers of such
Transaction Party authorized to sign this Amendment; and
(c) SUPPORTING DOCUMENTS. Such other supporting documents as
the Purchaser may reasonably request.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
Section 7.1. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. In order to
induce the parties hereto to enter into this Amendment, the Issuer represents
and warrants to each other party hereto that:
(a) The representations and warranties contained in Section
4.1 of the Transaction Agreement are true and correct at and as of the
time of the effectiveness hereof
(b) The Issuer is duly authorized to execute and deliver this
Amendment and is and will continue to be duly authorized to perform its
obligations under the Transaction Documents to which it is a party. The
Issuer has duly taken all corporate action necessary to authorize the
execution and delivery of this Amendment and to authorize the
performance of the obligations of the Issuer hereunder.
(c) The execution and delivery by the Issuer of this
Amendment, the performance by the Issuer of its obligations hereunder
and the consummation of the transactions contemplated hereby do not and
will not conflict with any provision of law, statute, rule or
regulation or of the articles of incorporation and bylaws of the
Issuer, or of any material agreement, judgment, license, order or
permit applicable to or binding upon the Issuer, or result in the
creation of any lien, charge or encumbrance upon any assets or
properties of the Issuer. Except
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THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 8.5. COUNTERPARTS. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
IN WITNESS WHEREOF, this Amendment is executed as of the date first
above written.
SOUTHWESTERN PUBLIC SERVICE COMPANY
By:
------------------------------------------------
Xxxxxx X. Xxxxxxxxx
Secretary and Treasurer
CAP ROCK ELECTRIC COOPERATIVE, INC..
By: /s/ Xxxxx Xxxxxx
------------------------------------------------
Xxxxx Xxxxxx
President
OTP, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------------
Xxxxx Xxxxxx
President
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METROPOLITAN LIFE INSURANCE COMPANY
By:
------------------------------------------------
Name:
Title:
METROPOLITAN PROPERTY AND CASUALTY
INSURANCE COMPANY
By:
------------------------------------------------
Name:
Title:
METROPOLITAN INSURANCE AND ANNUITY
COMPANY
By:
------------------------------------------------
Name:
Title:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By:
------------------------------------------------
Xxxxxxx X. Xxxxxx
Vice President and Trust Officer
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APPENDIX A
to Second Amendment to Transaction Documents
SCHEDULE 1
PURCHASER SCHEDULE
------------------
Name, Address and Payment Principal Amount
Provisions of Holder of Notes to be
Purchased
--------------------------------------------------------------------------------
METROPOLITAN LIFE INSURANCE COMPANY 1993 Notes:
$18,083,333.33
1994 Notes:
$ 7,917,326.00
IN THE CASE OF ALL PAYMENTS ON ACCOUNT
OF THE NOTES BY:
(a) crediting (in the form of a bank wire transfer of federal or
other immediately available funds) its account no.
002-2-410591 at The Chase Manhattan Bank N.A., Metropolitan
Branch, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000; and
(b) providing sufficient information (including PPN number )
to identify the source and application of funds and requesting
the bank to send a credit advice thereof to Metropolitan Life
Insurance Company.
IN THE CASE OF ALL OTHER COMMUNICATIONS:
Metropolitan Life Insurance Company
Capital Markets Group
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Vice President
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Name, Address and Payment Principal Amount
Provisions of Holder of Notes to be
Purchased
--------------------------------------------------------------------------------
with a copy to:
Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
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METROPOLITAN INSURANCE AND ANNUITY COMPANY 1993 Notes:
$6,027,777.78
1994 Notes:
$4,948,329.00
IN THE CASE OF ALL PAYMENTS ON ACCOUNT
OF THE NOTES BY:
(a) crediting (in the form of a bank wire transfer of federal or
other immediately available funds) its account no.
000-0-000000 at The Chase Manhattan Bank, N.A., Metropolitan
Branch, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000; and
(b) providing sufficient information (including PPN ) to
identify the source and application of funds and requesting
the bank to send a credit advice thereof to Metropolitan
Insurance and Annuity Company.
IN THE CASE OF ALL OTHER COMMUNICATIONS:
Metropolitan Insurance and Annuity Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Vice-President
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Name, Address and Payment Principal Amount
Provisions of Holder of Notes to be
Purchased
--------------------------------------------------------------------------------
METROPOLITAN PROPERTY AND
CASUALTY INSURANCE COMPANY 1993 Notes:
$6,888,888.89
1994 Notes:
$0
IN THE CASE OF ALL PAYMENTS ON ACCOUNT
OF THE NOTES BY:
(a) crediting (in the form of a bank wire transfer of federal or
other immediately available funds) its account no.
000-0-000000 at The Chase Manhattan Bank, N.A., Metropolitan
Branch, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx XX 00000; and
(b) providing sufficient information (including PPN ) to
identify the source and application of funds and requesting
the bank to send a credit advice thereof to Metropolitan
Property and Casualty Insurance Company.
IN THE CASE OF ALL OTHER COMMUNICATIONS:
Metropolitan Property and Casualty
Insurance Company
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Treasurer
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APPENDIX B
to Second Amendment to Transaction Documents
EXHIBIT A-1
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE
REGISTRATION OR QUALIFICATION UNDER FEDERAL OR STATE SECURITIES LAWS.
OTP, INC.
ADJUSTABLE RATE SENIOR SECURED NOTE DUE SEPTEMBER 9, 2003
No. ___________ [Date]
$________________
FOR VALUE RECEIVED, the undersigned, OTP, INC. (the "ISSUER"), a
corporation organized and existing under the laws of the State of Texas,
hereby promises to pay to _________________, or registered assigns, the
principal sum of ________________________________ DOLLARS on September 9, 2003,
with interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid balance thereof at the Reference Rate from the date hereof, payable
monthly on the ninth day of each calendar month, commencing with October 9,1993,
until the principal hereof shall have become due and payable, and (b) on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Yield-Maintenance Amount (as
defined in the Agreement), payable monthly as aforesaid (or, at the option of
the registered holder hereof, on demand), at the Late Payment Rate.
Payments of principal of, interest on and any Yield-Maintenance
Amount payable with respect to this Note are to be made at the main office of
Metropolitan Life Insurance Company in New York, New York or at such other
place as the holder hereof shall designate to the Issuer in writing, in
lawful money of the United States of America.
This Note is one of a series of Adjustable Rate Senior Secured
Notes (the "NOTES") issued pursuant to a Note Purchase Agreement, dated as of
September 9, 1993 (the "AGREEMENT"), between the Issuer and the Note Purchaser
and is entitled to the benefits thereof. Terms which are defined in the
Agreement and which are used but not
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defined herein shall have the meanings given them in the Agreement. This Note
is secured by liens and security interests under the Security Documents
described in the Agreement.
This Note is a registered Note and, as provided in the Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the Transferee. Prior to due presentment for
registration of transfer, the Issuer may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Issuer shall not be affected by any
notice to the contrary.
On the ninth day of each calendar month, commencing October 9, 1993
and continuing through September 9, 2003, the Issuer shall pay the principal
and interest on each Note as set forth on Schedule 1 attached hereto and made
a part hereof, without any Yield-Maintenance Amount. The Issuer agrees to
make all other required prepayments of principal and interest specified in
the Agreement. This Note is also subject to optional prepayment, in whole or
from time to time in part, during the periods and on the terms specified in
the Agreement.
If an Event of Default, as defined in the Agreement, shall occur and
be continuing, the principal of this Note may be declared or otherwise become
due and payable in the manner and with the effect provided in the Agreement.
The Issuer and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (to the extent
set forth in the Agreement), protest and diligence in collecting.
Should any indebtedness represented by this Note be collected at law
or in equity, or in bankruptcy or other proceedings, or should this Note be
placed in the hands of attorneys for collection, the Issuer agrees to pay, in
addition to the principal, premium, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses (including those incurred in
connection with any appeal).
The Issuer, and the purchaser and the registered holder of this Note
specifically intend and agree to limit contractually the amount of interest
payable under this Note to the maximum amount of interest lawfully permitted
to be charged under applicable law. Therefore, none of the terms of this Note
shall ever be construed to create a contract to pay interest at a rate in
excess of the maximum rate permitted to be charged under applicable law, and
neither the Issuer nor any other party liable or to become liable hereunder
shall ever be liable for interest in excess of the amount determined at such
maximum rate, and the provisions of Paragraph 7G of the Agreement shall
control over any contrary provision of this Note.
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THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
OTP, INC.
By: /s/ XXXXX XXXXXX
---------------------------------
Xxxxx Xxxxxx, President
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EXHIBIT A-2
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE
REGISTRATION OR QUALIFICATION UNDER FEDERAL OR STATE SECURITIES LAWS.
OTP, INC.
ADJUSTABLE RATE SENIOR SECURED NOTE DUE SEPTEMBER 9, 2003
No. ___________ [Date]
$________________
FOR VALUE RECEIVED, the undersigned, OTP, INC. (the "ISSUER"), a
corporation organized and existing under the laws of the State of Texas,
hereby promises to pay to _________________________, or registered assigns,
the principal sum of ________________________________ DOLLARS on September 9,
2003, with interest (computed on the basis of a 360-day year--30-day month)
(a) on the unpaid balance thereof at the Reference Rate from the date hereof,
payable monthly on the ninth day of each calendar month, commencing with
December 9, 1994, until the principal hereof shall have become due and
payable, and (b) on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Yield-Maintenance Amount (as defined in the Agreement), payable monthly as
aforesaid (or, at the option of the registered holder hereof, on demand), at
the Late Payment Rate.
Payments of principal of, interest on and any Yield-Maintenance
Amount payable with respect to this Note are to be made at the main office of
Metropolitan Life Insurance Company in New York, New York or at such other
place as the holder hereof shall designate to the Issuer in writing, in
lawful money of the United States of America.
This Note is one of a series of Adjustable Rate Senior Secured Notes
(the "NOTES") issued pursuant to a Note Purchase Agreement, dated as of
September 9, 1993 (as heretofore amended, the "AGREEMENT"), between the
Issuer and the Note Purchaser
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and is entitled to the benefits thereof. Terms which are defined in the
Agreement and which are used but not defined herein shall have the meanings
given them in the Agreement. This Note is secured by liens and security
interests under the Security Documents described in the Agreement.
This Note is a registered Note and, as provided in the Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the Transferee. Prior to due presentment for
registration of transfer, the Issuer may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Issuer shall not be affected by any
notice to the contrary.
On the ninth day of each calendar month, commencing December 9, 1994
and continuing through September 9, 2003, the Issuer shall pay the principal
and interest on each Note as set forth on Schedule 1 attached hereto and made
a part hereof, without any Yield-Maintenance Amount. The Issuer agrees to
make all other required prepayments of principal and interest specified in
the Agreement. This Note is also subject to optional prepayment, in whole or
from time to time in part, during the periods and on the terms specified in
the Agreement.
If an Event of Default, as defined in the Agreement, shall occur and
be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
The Issuer and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (to the
extent set forth in the Agreement), protest and diligence in collecting.
Should any indebtedness represented by this Note be collected at law
or in equity, or in bankruptcy or other proceedings, or should this Note be
placed in the hands of attorneys for collection, the Issuer agrees to pay, in
addition to the principal, premium, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses (including those incurred in
connection with any appeal).
The Issuer, and the purchaser and the registered holder of this Note
specifically intend and agree to limit contractually the amount of interest
payable under this Note to the maximum amount of interest lawfully permitted
to be charged under applicable law. Therefore, none of the terms of this Note
shall ever be construed to create a contract to pay interest at a rate in
excess of the maximum rate permitted to be charged under applicable law, and
neither the Issuer nor any other party liable or to become liable hereunder
shall ever be liable for interest in excess of the amount determined at such
maximum rate, and the provisions of Paragraph 7G of the Agreement shall
control over any contrary provision of this Note.
-2-
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
OTP, INC.
By: /s/ XXXXX XXXXXX
---------------------------------
Xxxxx Xxxxxx, President
-3-
APPENDIX C
to Second Amendment to Transaction Documents
EXHIBIT C
REQUEST FOR DISTRIBUTION
Reference is made to that certain Indenture and Security Agreement
dated as of September 9, 1993 (as from time to time amended, the "Trust
Indenture"), by and among Southwestern Public Service Company (the "Supplier"),
Cap Rock Electric Cooperative, Inc. (the "User"), OTP, Inc. (the "Issuer"),
Metropolitan Life Insurance Company, Metropolitan Insurance and Annuity Company
and Metropolitan Property and Casualty Insurance Company (collectively, the
"Purchaser") and Texas Commerce Bank National Association (the "Indenture
Trustee"). Terms which are defined in the Trust Indenture are used herein with
the meanings given them in the Trust Indenture. Pursuant to Section 4.03 of the
Trust Indenture, the Issuer hereby requests the Indenture Trustee to distribute
from the Construction Account the sum of $_______________.
Pursuant to such request for distribution, each of the Issuer and the
User hereby represents, warrants, acknowledges, and agrees that:
(a) The Responsible Officer of each of the Issuer and the User
signing this instrument is a duly elected, qualified and acting
Responsible Officer of the Issuer or the User, as applicable, holding
the office indicated below such Responsible Officer's signature hereto,
having all necessary authority to act for the Issuer or the User, as
applicable, in making the request herein contained.
(b) The representations and warranties of the Issuer and the
User set forth in the Transaction Agreement and the other Transaction
Documents are true and correct on and as of the date hereof (except to
the extent that the facts on which such representations and warranties
are based have been changed by the transactions contemplated by the
Transaction Documents), with the same effect as though such
representations and warranties had been made on and as of the date
hereof.
(c) There does not exist on the date hereof any condition or
event which constitutes a Default which has not been waived in writing
as provided in Section 10.07 of the Trust Indenture; nor will any such
Default exist upon the Issuer's receipt and application of the
distribution from the Construction Account requested hereby. The Issuer
will use the distribution from the Construction Account hereby
requested in compliance with Paragraph 2B of the Note Purchase
Agreement.
(d) There does not exist on the date hereof any action, suit
or legal, equitable, arbitrative or administrative proceedings pending
or, to the knowledge of the Issuer, threatened against Issuer before
any federal, state, municipal or other court, department, commission,
body, board, bureau, agency or
-1-
instrumentality, domestic or foreign, pertaining to any environmental
matter or that is material to the Issuer.
(e) Except to the extent waived in writing as provided in
Section 10.07 of the Trust indenture, the Issuer has performed and
complied with all agreements and conditions in the Transaction
Documents required to be performed or complied with by the Issuer on or
prior to the date hereof.
(f) After the making of the distribution from the Construction
Account requested hereby the aggregate amount of distributions from the
Construction Account for the construction of all of the Segments will
be $__________ and such amount will not be in excess of $44,000,000.
(g) The User has a valid fee, leasehold or easement interest
in and to each portion of the Site upon which any disbursed funds have
previously been or will be used and a valid interest in and to the
other Property Rights relating to such portion.
(h) Any and all consents, approvals, authorizations and orders
of, and notices to or filings with, any court or governmental authority
or third party required in connection with each portion of the Site
upon which any disbursed funds have previously been or will be used
have been received.
(i) Attached hereto is a true, complete and correct list of
invoices paid or to be paid with the distribution requested herein,
identifying the payee, invoice number and dollar amount.
(j) Attached hereto is a true, complete and correct list of
specific equipment and other property constituting the Facility.
(k) The Transaction Documents have not been modified, amended
or supplemented by any unwritten representations or promises, by any
course of dealing, or by any other means not provided for therein. The
Trust Indenture and the other Transaction Documents are hereby
ratified, approved, and confirmed in all respects.
The Responsible Officer of each of the Issuer and the User signing this
instrument hereby certifies that, to the best of his knowledge after due
inquiry, the above representations, warranties, acknowledgements, and agreements
of the Issuer and the User are true, correct and complete.
-2-
IN WITNESS WHEREOF, this instrument is executed as of ___________, 19__.
OTP, INC.
By: /s/ XXXXX XXXXXX
--------------------------------
Name:
Title:
CAP ROCK ELECTRIC COOPERATIVE,
INC.
By: /s/ XXXXX XXXXXX
--------------------------------
Name:
Title:
-3-
APPENDIX D
TO SECOND AMENDMENT TO TRANSACTION DOCUMENTS
APPENDIX D-1
[OPINION OF XXXXXX, COX, XXXXX, XXXXXXXX & XXXXXXX]
November 9,1994
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Texas Commerce Bank National Association, as Indenture Trustee
000 Xxxxxx, 0xx xxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 6.1(a)(i)
of the Second Amendment to Transaction Documents of even date herewith (the
"AMENDMENT") by and among Southwestern Public Service Company (the "SUPPLIER"),
Cap Rock Electric Cooperative, Inc. (the "USER"), OTP, Inc. (the "ISSUER"),
Metropolitan Life Insurance Company, Metropolitan Insurance and Annuity
Company, and Metropolitan Property and Casualty Insurance Company
(collectively, the "PURCHASER"), and Texas Commerce Bank National Association,
as the Indenture Trustee (the "INDENTURE TRUSTEE"). Terms which are defined in
the Amendment and which are used but not defined herein shall have the meanings
given them in the Amendment.
We have acted as counsel for the Supplier in connection with the
transactions provided for in the Amendment. As such counsel, we have assisted
in the negotiation of the Amendment and have advised our client of its duties
and obligations thereunder. We have examined executed counterparts (or, where
indicated, photostatic copies of executed counterparts) of the documents listed
in Schedule 1. (The documents listed in Section I of Schedule 1 are hereinafter
referred to as the "PRINCIPAL DOCUMENTS.") We have discussed the matters
addressed in this opinion with officers and representatives of the Supplier to
the extent we have deemed appropriate to enable us to render this opinion. In
particular, but without limitation, we have confirmed that the Supplier
acknowledges, understands, and agrees that the Transaction Documents as written
set forth the entire understanding and agreement of the parties thereto.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 2
In preparing this opinion, we have also examined original counterparts
of photostatic or certified copies of all other instruments, agreements,
certificates, records, and other documents (whether of the Supplier or its
officers, directors, shareholders, and representatives, public officials, or
other persons) which we have considered relevant hereto. In making this
examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as photostatic or certified
copies, and the authenticity of the originals of such copies.
Based upon the foregoing, and subject to the qualifications and
exceptions hereinafter set forth, we are of the opinion that:
1. The Supplier is duly incorporated, validly existing, and in good
standing under the laws of New Mexico. The Supplier has all requisite corporate
power to make or enter into the Principal Documents to which it is a party and
to perform its obligations thereunder.
2. The Supplier is duly qualified to transact business and in good
standing in Texas.
3. The Principal Documents have been duly authorized, executed, and
delivered by the Supplier. The Principal Documents constitute the legal, valid,
and binding instruments and agreements of the Supplier, and the obligations of
the Supplier under the Principal Documents are enforceable in accordance with
the terms thereof.
4. The Supplier is not (i) a "holding company" or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended, or (ii) an "investment
company" or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
5. The Supplier is a "public utility" subject to the provisions of the
Federal Power Act, as amended (the "Power Act"); however, the Supplier is
exempt from the provisions of Section 204 of the Power Act pursuant to Section
204(f) of the Power Act.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 3
6. The execution, delivery, and performance by the Supplier of the
Principal Documents, and the consummation of the transactions contemplated by
the Principal Documents, will not and did not (a) violate or contravene any
provision of the articles of incorporation or bylaws of the Supplier, or (b) to
the best of our knowledge, conflict with or result in a breach of any material
term or provision of or constitute a default under or result in the maturing of
any indebtedness pursuant to any indenture, mortgage, deed of trust, note, or
loan agreement, or other material agreement or instrument, of which we have
knowledge to which the Supplier is a party or by which it or any of its
properties are bound or (c) result in a violation of any law, rule, or
regulation or, to the best of our knowledge, any judgment, order, decree,
determination, or award of any court or governmental authority which is now in
effect and applicable to the Supplier or to its properties. To the best of our
knowledge, the Supplier is not in default under or in violation of any law,
rule, regulation, judgment, order, decree, determination, award, indenture,
mortgage, deed of trust, note, loan agreement, or other material agreement or
instrument of which we have knowledge, or in violation of its articles of
incorporation or bylaws.
7. Except for that which has been obtained by the Supplier as
indicated on Schedule 1 hereto, to the best of our knowledge, no consent,
approval, authorization, or order of any court or governmental agency or any
third party is or was required (a) for the execution and delivery by the
Supplier of any of the Principal Documents, (b) for the consummation of the
transactions contemplated by the Principal Documents, or (c) for the
performance by the Supplier of its obligations thereunder.
8. Other than as previously revealed to the Purchaser in writing, to
the best of our knowledge, there are no actions, suits, proceedings, or
investigations pending or threatened against or affecting the Supplier or any
of its properties in any court or governmental agency (a) seeking to enjoin, or
questioning the legality or validity of, the performance by the Supplier of any
of its obligations under the Principal Documents, or (b) which have, or would
have if adversely determined, a material adverse effect on the ability of the
Supplier to perform such obligations.
9. To the best of our knowledge, (a) the representations and
warranties of the Supplier in the Principal Documents are and were true and
correct in all material respects on the date hereof and on the dates when made,
and (b) there does not exist on the date hereof any Default or Event of Default
under the Transaction Agreement.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 4
This opinion is limited by, subject to, and based on the following:
(a) This opinion is limited in all respect to the laws of
Texas and New Mexico and applicable federal law.
(b) In rendering the opinion expressed in the second sentence
of paragraph 3 hereof, we have assumed that each of the Principal
Documents in which the User's, the Issuer's, the Indenture Trustee's,
or the Purchaser's execution is provided for has been duly
authorized, executed, and delivered by the User, the Issuer, the
Indenture Trustee, or the Purchaser, as the case may be.
(c) In connection with opinions expressed herein as being
limited "to the best of our knowledge," our examination has been
limited to discussions with the officers and representatives of the
Supplier and our knowledge of the affairs of the Supplier as its
counsel, and we have made no independent investigations as to the
accuracy or completeness of any representations, warranties, data, or
other information, written or oral, made or furnished by the Supplier
to us, the Indenture Trustee, or the Purchaser.
(d) The enforceability of the respective obligations of the
parties to the Transaction Documents, and the availability of certain
rights and remedies provided for therein, may be limited by (i)
applicable state and federal laws and judicial decisions, but the
remedies provided for in the Principal Documents are adequate for the
practical realization of the benefits provided thereby, (ii) the rights
of the United States under the Federal Tax Lien Act of 1966, as
amended, liens under Title IV of the Employee Retirement Income
Security Act of 1974, as amended, and the power of the United States
and other governmental authorities to take actions injurious to the
Purchaser or the Indenture Trustee under the principal of sovereign
immunity, (iii) general principles of equity (regardless of whether
enforceability is sought in a proceeding in equity or at law), or
(iv) applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally.
The opinions herein expressed are (i) rendered as of the date hereof,
and we undertake no, and hereby disclaim any, obligation to advise you of any
changes or any new developments which might affect any matters or opinions set
forth herein, and (ii) for the benefit of the Purchaser and the Indenture
Trustee, as trustee for the
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 5
Holders, and may be relied upon only by the Purchaser, the Indenture Trustee,
the Holders, and by Xxxxxxxx & Xxxxxx, a Professional Corporation, in connection
with any opinion delivered by them to the Purchaser.
Respectfully submitted,
SCHEDULE 1 TO APPENDIX D-1
SECTION I. PRINCIPAL DOCUMENTS
1. The Amendment.
2. The Transaction Agreement, as amended by the Amendment.
3. The Note Purchase Agreement, as amended by the Amendment.
4. The Supplier's Guaranty, as amended by the Amendment.
5. The Receivables Purchase Agreement, as amended by the Amendment.
6. The Trust Indenture, as amended by the Amendment.
7. The Transmission Agreement, as amended by the Amendment.
SECTION II. CORPORATE DOCUMENTS
AND PROCEEDINGS
8. Certificate of the President and the Secretary/Treasurer of the
Supplier of even date herewith, with respect to
(a) Representations and Warranties made by the Supplier in Article
VII of the Amendment.
(b) The continued effectiveness of the incumbency and specimen
signatures of the signing officers of the Supplier.
(c) Resolutions adopted by the Board of Directors of the Supplier.
SECTION III. CONSENTS, APPROVALS,
AUTHORIZATIONS AND ORDERS
9. Order in Case No. 2528 dated September 7, 1993 issued by the New Mexico
Public Utility Commission authorizing the Supplier to guaranty the
financing transaction contemplated by the Transaction Documents.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 7
10. Order in Case No. 2611 dated November 7, 1994 issued by the New Mexico
Public Utility Commission authorizing the Supplier to guaranty the
financing transaction contemplated by the Transaction Documents.
APPENDIX D-2
[OPINION OF XXXXXX & XXXXXXXXX, P.C.]
November 9, 1994
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx XxxX Xxx Xxxx 00000
Texas Commerce Bank National Association, as Indenture Trustee
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This opinion is being delivered to you at the request of Cap Rock
Electric Cooperative, Inc. (the "USER") and OTP, Inc. (the "ISSUER"), pursuant
to Section 6.1(a)(ii) of the Second Amendment to Transaction Documents of even
date herewith (the "Amendment") by and among Southwestern Public Service Company
(the "SUPPLIER"), the User, the Issuer, Metropolitan Life Insurance Company,
Metropolitan Insurance and Annuity Company, and Metropolitan Property and
Casualty Insurance Company (collectively, the "PURCHASER") and Texas Commerce
Bank National Association, as the Indenture Trustee (the "INDENTURE TRUSTEE").
Terms which are defined in the Amendment and which are used but not defined
herein shall have the meanings given them in the Amendment.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "ACCORD") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations all as
more particularly described in the Accord, and this Opinion letter should be
read in conjunction therewith. The law covered by the opinions expressed herein
is limited to the Federal law of the United States and the laws of the State of
Texas. This firm is a professional corporation organized under the laws of the
State of Texas.
We have acted as special counsel for the User and the Issuer in
connection with the transactions provided for in the Amendment. The documents
listed in Section I of Schedule 1 are hereinafter referred to as the "PRINCIPAL
DOCUMENTS."
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 2
We note that various issues concerning the status of legal proceedings
and no violation of law as to the Public Utility Regulatory Act ("PURA"), Tex.
Rev. Civ. Stat. Xxx. art 1446c, are addressed in the opinion of Xxxxx,
Xxxxxxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx, P.C. separately provided to you and we
express no opinion with respect to those matters.
We note that various issues concerning the taking of all necessary
corporate action to authorize the execution, delivery, and performance of the
Principal Documents by the User and the Issuer, the breach of Other Agreements
or Constituent Documents, and the status of legal proceedings is addressed in
the opinion of XxXxxxx & Xxxx, P.C., separately provided to you and we express
no opinion with respect to those matters other than as expressly set forth in
this Opinion Letter.
We have not acted as General Counsel for either User or the Issuer, and
it is our understanding that such entities have used other counsel with regard
to other matters. In connection with the foregoing, we have made such legal and
factual examinations and inquiries for purposes of rendering this opinion,
limited to examination of the following:
1. Articles of Incorporation and By-Laws of the User and the
Issuer;
2. Directors' minutes and resolutions authorizing the subject
transaction;
3. Certification of Account Status from the Comptroller of Public
Accounts of the State of Texas as to:
A The User, as of November 8, 1994 (a copy of which is
attached as Exhibit "1");
B. The Issuer, as of November 8, 1994 (a copy of which
is attached as Exhibit "2");
4. Certificate of Existence from the Secretary of State of Texas
as to:
A. The User, as of November 8, 1994 (a copy of which is
attached as Exhibit "3"); and
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 3
B. The Issuer, as of November 8, 1994 (a copy of which
is attached as Exhibit "4").
In addition, we have examined originals or photostatic, certified or
conformed copies of all such agreements, documents, instruments, corporate
records, certificates of public officials, public records, and certificates of
officers of the Issuer and User as we have deemed necessary or appropriate in
the circumstances. In addition to the assumptions set forth in Section 4 of the
Accord (as used therein for the purposes of this Opinion,, the term "client"
shall mean the User and the Issuer) and the assumptions set forth herein, we
have relied upon the factual representations made to us by the User and the
Issuer (including representations made by the User in Section 7.3 of the
Amendment and representations made by the Issuer in Section 7.1 of the
Amendment). All opinions stated herein are as of the date hereof, with the
exception of the opinions stated in paragraph 1 below, pertaining to the
existence and good standing, which are as of the dates referenced in paragraphs
3A, 3B, 4A and 4B above.
However, we have not examined all records of the User and the Issuer
and have examined only such records as have been produced by the User and the
Issuer in response to our requests. To the best of the Opinion Giver's Actual
Knowledge, none of our requests were refused.
Based upon all the matters set forth above and subject to the foregoing
and such further limitations and qualifications that may be set forth below, we
are of the opinion that:
1. Each of the User and the Issuer is duly incorporated,
validly existing and in good standing under the laws of the State of Texas.
Each of the User and the Issuer has all requisite corporate power to make or
enter into the Principal Documents executed and delivered by the User and the
Issuer and to perform its obligations thereunder.
2. The Principal Documents constitute the legal, valid and
binding instruments and agreements of each of the User and the Issuer, and the
obligations of each of the User and the Issuer under the Principal Documents
executed and delivered by the User and the Issuer are enforceable in
accordance with the terms thereof.
3. Neither the execution nor the delivery by the User or the
Issuer of the Principal Documents will violate any of the provisions of the
Constituent Documents of
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 4
the Issuer, or any Law, provided, however, no opinion is expressed as to (i)
PURA, (ii) the Public Utility Holding Company Act of 1935, (iii) the Federal
Power Act, or (iv) any laws pertaining to local authorities, whether
municipalities, counties, special purpose districts, or otherwise.
4. Neither the User nor the Issuer is an "investment company"
or a company "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
The foregoing opinions are subject to the following assumptions,
limitations, qualifications and exceptions:
A. This Opinion incorporates by reference the following
qualifications, and this Opinion should be read in conjunction therewith.
(1) provisions restricting access to courts or to legal
or equitable remedies or purporting to affect the
jurisdiction or venue of courts;
(2) provisions purporting to establish evidentiary
standards for suits or proceedings to enforce the
Transaction Documents;
(3) provisions purporting to waive rights to notice,
legal defenses, statutes of limitations, or other
benefits that cannot be waived under applicable law.
(4) provisions granting powers of attorney or authority
to execute documents or to act by power of attorney
on behalf of the Client;
(5) self-help remedies provided for in the Transaction
Documents (other than those remedies available
pursuant to an exercise in accordance with provisions
of Section 51.002 of the Property Code or Chapter 9
of the Texas Business and Commerce Code;
(6) provisions providing that remedies are cumulative;
(7) provisions that decisions by a party are conclusive;
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 5
(8) provisions purporting to provide remedies
inconsistent with the Texas Business and Commerce
Code, to the extent the Texas Business and Commerce
Code is applicable thereto; and
(9) provisions purporting to grant or limit rights of
third parties;
B. The General Qualifications and the qualifications set forth
in paragraph A above apply to the opinions set forth in paragraph 3 above
(such portion of paragraph 3 above is referred to as the No Breach or Default
Opinion and the No Violation of Law Opinion) as well as to the opinion set
forth in paragraph 2 above that relates to enforceability (such portion of
paragraph 2 above is referred to as the Remedies Opinion).
C. In addition to the General Qualifications and the
qualifications set forth in paragraph A above, the Remedies Opinion set forth
in paragraph 2 above is subject to the qualifications that certain of the
provisions in the Principal Documents may not be enforceable in whole or in
part under the laws of the State of Texas or the United States, but such
provisions do not void the Principal Documents or frustrate the basic purpose
thereof, and the Principal Documents contain adequate provisions for the
practical realization of the rights and benefits afforded thereby, except for
the economic consequences of any judicial, administrative or other delay or
procedure which may be imposed by applicable federal or state law, rules,
regulations, and court decisions and by constitutional requirements in and of
the State of Texas or the United States. In addition, we express no opinion as
to the enforceability of any provisions contained in the Principal Documents
purporting to (i) provide that a delay or failure by either the Purchaser, the
Supplier, the Indenture Trustee, any Holder of any Note or any Holder of any
Receivable to exercise any right, remedy or option under any of the Principal
Documents will not operate as a waiver, or that any single or partial exercise
of any such right, remedy or option will not preclude any further exercise
thereof, (ii) establish, as to third parties, nonculpability for actions
taken by either the Purchaser, the Supplier, the Indenture Trustee, any Holder
of any Note or any Holder of any Receivable, (iii) waive any rights or the
benefits of any laws under applicable statutes or rules hereafter enacted or
promulgated, (iv) permit either the Purchaser, the Supplier, the Indenture
Trustee, any Holder of any Note or any Holder of any Receivable to take any
action on behalf of or in the name of the User or the Issuer, (v) prohibit
oral agreements, amendments or waivers or limit the effect of a course of
dealing between the parties, or (vi) impose
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 6
increased interest rates upon default or delinquency in payment to the extent
any such provisions are deemed to be penalties or forfeitures.
D. We express no opinion as to any aspects of (i) PURA, (ii)
the Public Utility Holding Company Act of 1935, (iii) the Federal Power Act,
or (iv) any laws pertaining to local authorities, whether municipalities,
counties, special purpose districts, or otherwise.
E. All opinions contained herein which relate to the issue of
usury are expressly limited to an analysis of whether the Principal Documents,
as written, will be subject to a defense or claim as a result of the Purchaser
contracting for a usurious rate of interest. The opinions given herein as to
usury are expressly limited to the issues relating to the contracting for, as
opposed to the charging or receiving of, usurious amount of interest. In this
regard, the provision for interest on overdue principal and interest, as set
forth in the Principal Documents, may result in additional interest.
Additionally, utilization of the method of computation of interest (the 360
day year provision) contained in the Principal Documents will result in
additional interest. We have assumed that any fees, costs and expenses paid to
you in connection with the Principal Documents or otherwise, are, or will be,
for services actually rendered or for commitments actually extended and that
such fees, costs and expenses will not exceed just and reasonable compensation
for such services and commitments. We have also assumed that the Purchaser,
the Supplier, the Indenture Trustee, the Holder of any Notes or the Holder of
any Receivables will comply with the savings clause, (including, without
limitation, the spreading provisions with respect to all amounts which may be
deemed to constitute interest) contained in the Principal Documents.
F. The phrase "Primary Lawyer Group" as used in the Accord is
hereby modified and, for purposes of applying the Accord to this Opinion
Letter, the Primary Lawyer Group means the lawyers in the San Antonio office
of this firm who have given substantive legal attention to the representation
of the User and the Issuer in connection with this transaction.
G. In rendering the opinion set forth in paragraph 1 above as
to good standing and/or existence of the User and the Issuer in the State of
Texas, we have relied solely upon the Certificates listed in paragraphs 3 A & B
and 4 A & B above.
H. We have made no examination of and express no opinion as to
(i) the title or rights of the User or the Issuer to or in the Facility, (ii)
the existence of or freedom
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 7
from any security interest, lien, charge or encumbrance thereon except as
expressly set forth herein, or (iii) the accuracy or sufficiency of the
descriptions of any of the Facility.
I. We have made no examination of and express no opinion as to
(i) the sufficiency of any consideration expressed in the Principal Documents,
or (ii) the impact of the transaction on the financial statements of any of
the parties.
J. We express no opinion as to the enforceability of (i) Section
5.4 of the Transaction Agreement (Indemnity in favor of the Indenture Trustee),
as it pertains to the Indenture Trustee's negligence, (ii) Section 8.9 of the
Transaction Agreement (Personal Property) as it purports to classify fixtures
as personality, or (iii) Section 8.13 of the Transaction Agreement (Waiver of
Jury Trial, Punitive Damages, etc.).
K. In addition to other limitations set forth herein, the
Remedies Opinion set forth in paragraph 2 above is subject to the
qualification that the Opinion Giver is relying upon the factual
representation contained in the Omnibus Certificates of the User and the
Issuer, provided at closing, as to the actual execution and delivery of the
Principal Documents by Xxxxx Xxxxxx and Xxxxxx X. Xxxxxxxx as the President
and Secretary, respectively, of the User and the Issuer.
L. We express no opinion as to the effectiveness of Section 3.05
(ii) (Remedies) of the Indenture and Security Agreement, as it purports to
require the assembly of the Facility at a place designated by the Indenture
Trustee.
The opinions herein expressed are solely for the benefit of the
Purchaser, each Holder, and the Indenture Trustee, as trustee for the Holders,
and may be used or relied upon only by the Purchaser, the Indenture Trustee, the
Holders or by Xxxxxxxx & Xxxxxx, a Professional Corporation, to the extent
authorized by the Accord, and not for any other purpose, without in each
instance our prior written consent, provided, however, Xxxxxxxx & Xxxxxx may
rely upon the opinions in connection with any opinion delivered by them to the
Purchaser.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 8
Respectfully submitted,
XXXXXX & XXXXXXXXX P.C.
BY:
---------------------------------
XXXXX X. XXXXXX
SCHEDULE 1 TO APPENDIX D-2
SECTION I. PRINCIPAL DOCUMENTS
1. The Amendment.
2. The Transaction Agreement, as amended by the Amendment.
3. The Note Purchase Agreement, as amended by the Amendment.
4. The User's Guaranty, as amended by the Amendment.
5. The Trust Indenture, as amended by the Amendment.
6. The Transmission Agreement, as amended by the Amendment.
SECTION II. CORPORATE DOCUMENTS
AND PROCEEDINGS
7. Certificate of the President and the Chief Financial Officer of the
Issuer of even date herewith, with respect to
(a) Representations and Warranties made by the Issuer in Article
VII of the Amendment.
(b) Incumbency and specimen signatures of the signing officers of
the Issuer.
(c) Resolutions adopted by the Board of Director of the Issuer.
8. Certificate of the President and the Chief Financial Officer of the
User of even date herewith, with respect to
(a) Representations and Warranties made by the User in Article VII
of the Amendment.
(b) Incumbency and specimen signatures of the signing officers of
the User.
(c) Resolutions adopted by the Board of Director of the User.
APPENDIX D-3
[OPINION OF XXXXX, XXXXXXXXX, XXXXXX, XXXXXXX & XXXXXXXX, P.C.]
November 9, 1994
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Texas Commerce Bank National Association, as Indenture Trustee
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This opinion is being delivered to you at the request of Cap Rock
Electric Cooperative, Inc. (the "USER") and OTP, Inc. (the "ISSUER"), pursuant
to Section 6.1(a)(iii) of the Second Amendment to Transaction Documents of even
date herewith (the "Amendment") by and among Southwestern Public Service Company
(the "SUPPLIER"), the User, the Issuer, Metropolitan Life Insurance Company,
Metropolitan Insurance and Annuity Company and Metropolitan Property and
Casualty Insurance Company (collectively, the "PURCHASER") and Texas Commerce
Bank National Association, as the Indenture Trustee (the "INDENTURE TRUSTEE").
Terms which are defined in the Amendment and which are used but not defined
herein shall have the meanings given them in the Amendment.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "ACCORD") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law covered by the opinion expressed herein
is limited to the Public Utility Regulatory Act ("PURA"), Tex. Rev. Civ. Stat.
Xxx. art. 1446c.
I have acted as special regulatory counsel for the User and the Issuer
in connection with PURA issues within the State of Texas as it pertains to the
transactions provided for in the Amendment. I have examined those documents
listed in Schedule 1
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 2
(hereinafter referred to as the "PRINCIPAL DOCUMENTS") for the sole purpose of
issuing the opinion described herein.
I note that various issues concerning the taking of all necessary
corporate action to authorize the execution, delivery, and performance of the
Principal Documents by the User and the Issuer is addressed in the opinion of
XxXxxxx & Xxxx, P.C., separately provided to you and I express no opinion with
respect to those matters.
I note that various issues concerning the corporate status of the
Issuer and the User, the No Violation of Constituent Documents or Law Opinion,
are addressed in the opinion of Xxxxxx & Xxxxxxxxx, P.C., separately provided to
you and I express no opinion with respect to those matters.
In connection with the foregoing, I have made such legal and factual
examinations and inquiries for purposes of rendering this opinion, limited to
determining what regulatory actions will be necessary under PURA as a result of
this transaction. I give no opinion as to any other law, regulation, ordinance
or act.
Under PURA, Issuer is an "affiliate" or "affiliated interest" of User.
Issuer is not a public utility under PURA. PURA will not affect the
enforceability of the Principal Documents against the Issuer or the User.
For construction of each of the segments, the User or Supplier will
need to obtain a Certificate of Convenience and Necessity ("CCN") from the
Public Utility Commission of Texas ("PUC") under PURA Section 54. At present, a
CCN dated ________________ has been granted for the Northern Segment. A CCN
application was filed on ______________ with the PUC for the Southern Segment
and the Final Segment. It is anticipated that the PUC will make a final decision
on the Southern Segment and Final Segment CCN on or about _________________.
As each segment is transferred to Supplier, there will need to be a
report of the transfer filed under PURA Section 63. No PUC action is required
under Section 63. However, the PUC must take action and make a finding under
PURA Section 59 that Supplier is capable of rendering adequate service before
the CCN can be transferred. No consents or approvals from the PUC except as
described above are or were required (a) for the execution and delivery by each
of the User and the Issuer of any of the Principal Documents, (b) for the
consummation of the transactions contemplated by the Principal
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 3
Documents or (c) for the performance by each of the User and the Issuer of its
obligations thereunder.
In addition, I have examined originals or photostatic, certified or
conformed copies of all such agreements, documents, instruments, corporate
records, certificates of public officials, public records, and certificates of
officers of the Issuer and the User as I have deemed necessary or appropriate in
the circumstances. I have relied upon the assumptions set forth in Section 4 of
the Accord (as used therein for the purposes of this Opinion, the term "client"
shall mean the User and the Issuer) and the assumptions set forth herein. All
opinions stated herein are as of the date hereof.
However, I have not examined all records of the User and the Issuer and
have examined only such records as have been produced by the User and the Issuer
in response to my requests. To the best of the Opinion Giver's Actual Knowledge,
none of my requests were refused.
The foregoing opinion is subject to the following assumptions,
limitations, qualifications and exceptions:
I express no opinion as to the validity or any aspects of any of the
Principal Documents other than as expressly set forth in this Opinion Letter. I
express no opinion as to any aspects of public utility law, whether federal or
state, or local laws, as pertains to this transaction, whether direct or
indirect, other than PURA.
The opinion herein expressed is solely for the benefit of the Purchaser
and the Indenture Trustee, as trustee for the Holders, and is valid as of the
date of closing and may not be used or relied upon only by the Purchaser, the
Indenture Trustee, the Holders or by Xxxxxxxx & Xxxxxx, a Professional
Corporation, for any purpose whatsoever, except to the extent authorized by the
Accord, without in each instance our prior written consent, provided, however,
Xxxxxxxx & Xxxxxx may rely upon the opinions in connection with any opinion
delivered by them to the Purchaser.
Respectfully submitted,
XXXXX, XXXXXXXXX, XXXXXX,
XXXXXXX & XXXXXXXX, P.C.
SCHEDULE 1 TO APPENDIX D-3
PRINCIPAL DOCUMENTS
1. The Amendment.
2. The Transaction Agreement, as amended by the Amendment.
3. The Note Purchase Agreement, as amended by the Amendment.
4. The User's Guaranty, as amended by the Amendment.
5. The Trust Indenture, as amended by the Amendment.
6. The Transmission Agreement, as amended by the Amendment.
APPENDIX D-4
[OPINION OF XXXXXXX AND XXXX, P.C.]
November 9, 1994
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Texas Commerce Bank National Association, as Indenture Trustee
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This opinion is being delivered to you at the request of Cap Rock
Electric Cooperative, Inc. (the "USER") and OTP, Inc. (the "ISSUER"), pursuant
to Section 6.1(a)(iv) of the Second Amendment to Transaction Documents of even
date herewith (the "AMENDMENT") by and among Southwestern Public Service Company
(the "SUPPLIER"), the User, the Issuer, Metropolitan Life Insurance Company,
Metropolitan Insurance and Annuity Company, Metropolitan Property and Casualty
Insurance Company (collectively, the "PURCHASER") and Texas Commerce Bank
National Association, as the Indenture Trustee (the "INDENTURE TRUSTEE"). Terms
which are defined in the Amendment and which are used but not defined shall have
the same meanings given them in the Amendment.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law covered by the opinions expressed herein
is limited to the laws of the State of Texas.
I have acted as Counsel for the User and the Issuer in connection with
the adoption of resolutions necessitated by the Transaction Documents. As such
counsel, I have assisted in the preparation of the resolutions authorizing the
execution of certain of the Transaction Documents. I have examined those
documents listed in Schedule 1 for the sole purpose of issuing the No Breach or
Default Opinion and the No Violation of
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 2
Law Opinion, hereinafter described. The documents listed in Section 1 of
Schedule I are hereinafter referred to as the "PRINCIPAL DOCUMENTS".
I note that various issues concerning the corporate status of the
Issuer and the User, the No Violation of Constituent Documents or Law Opinion,
are addressed in the opinion of Xxxxxx & Xxxxxxxxx, P.C., separately provided to
you and I express no opinion with respect to those matters.
I note that various issues concerning the status of regulatory
proceedings and no violation of law as to public utilities within the State of
Texas are addressed in the opinion of Xxxxx, Xxxxxxxxx, Xxxxxx, Xxxxxxx &
Xxxxxxxx, P.C., separately provided to you and I express no opinion with respect
to those matters.
It is my understanding that both the User and the Issuer have used
other counsel with regard to other matters. In connection with the foregoing, I
have made such legal and factual examinations and inquiries for purposes of
rendering this Opinion, limited to examination of the following:
1. Articles of Incorporation
2. Directors' minutes and resolutions authorizing the subject transaction.
3. Those Material Agreements ("Other Agreements") set forth on the
attached Schedule 2.
In addition, I have examined originals or photostatic, certified or
conformed copies of all such agreements, documents, instruments, corporate
records, certificates of public officials, public records, and certificates of
officers of the Issuer and the User as I have deemed necessary or appropriate in
the circumstances. I have relied upon the assumptions set forth in Section 4 of
the Accord (as used therein for the purposes of this Opinion, the term "client"
shall mean the User and the Issuer) and the assumption set forth herein. All
opinions stated herein are as of the date hereof.
However, I have not examined all records of the User and the Issuer and
have examined only such records as have been produced by the User and the Issuer
in response to our requests. To the best of the Opinion Giver's Actual
Knowledge, none of my requests were refused.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 3
Based upon all the matters set forth above and subject to the foregoing
and such further limitations and qualifications that may be set forth below, I
am of the opinion that:
1. Each of the User and the Issuer has duly taken or caused to be taken
all necessary corporate action to authorize the execution, delivery,
and performance of the Principal Documents.
2. Neither the execution nor the delivery by the User or the Issuer of the
Principal Documents will breach, or result in a default under, the
Other Agreements. The opinion set forth in this paragraph 2 is based
upon and subject to the following assumptions, limitations,
disclosures, qualifications, and exceptions.
TEXAS UTILITIES 1990 POWER SUPPLY AGREEMENT:
On June 8, 1990, the User and Texas Utilities Electric Company entered
into a power supply agreement. This agreement was the subject of
litigation in the 238th Judicial District Court of Midland County,
Texas in Cause No. B-38,879. On December 2, 1992, the Court issued its
Amended Final Judgment declaring that said Agreement is a fully
binding, valid and enforceable contract; that Cap Rock (the "User") is
required to purchase all of its power and energy requirements from TU
Electric pursuant to the provisions of the 1990 Power Supply Agreement
until such time as Cap Rock provides the requisite notice(s) to TU
Electric as required by the terms of the 1990 Power Supply Agreement
and otherwise complies with the terms thereof. This decision was
appealed by the User to the Court of Appeals, Eight District of Texas,
El Paso, Texas. On February 2, 1994, an Appellate Court decision was
rendered which upheld the decision of the District Court below. Said
1990 Power Supply Agreement has certain two and three year notice
requirements wherein the User may give notice to TU Electric to remove
its load from the TU Electric system and transfer said load
requirements to another power supplier. This writer is advised by the
User that timely written notice of the User's intention to remove
certain loads from the TU Electric system beginning February 1, 1994,
and the balance of the User's load so noticed being removed from the TU
Electric system on February 1,1995. This writer has been advised by the
User that TU Electric has acknowledged receipt of such notice. On
February 1, 1994, the User moved a portion of the load in the Northern
Segment from the TU Electric system. However, at this time it remains
unclear
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 4
as to TU Electric's agreement with the User as to the total amount of
load that is to be transferred from the TU Electric system on February
1, 1994. This writer is also advised that TU Electric has acknowledged
its acceptance of the removal of the Cap Rock Electric load pursuant to
the notice given effective February 1, 1995.
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION MORTGAGE:
Article IV of the National Rural Utilities Cooperative Finance
Corporation ("CFC") Restated Mortgage executed by the User, dated March
30, 1993, together with additional Supplemental Mortgages, provides
that the User (mortgagor) shall not incur, assume, guarantee, or
otherwise become liable in respect of any debt other than "permitted
debt". This writer has been advised that written consent to this
transaction by CFC has been requested. The written consent by CFC has
been obtained.
XXXX XXXXXXX LEASING CORPORATION MASTER LEASE:
The User executed a Master Lease No. 3864 on certain electric system
facilities dated October 28, 1991, as a financing arrangement through
Xxxx Xxxxxxx Leasing Corporation. Paragraph 15 of said Master Xxxxx
provides that Xxxxxx (the User) may not assign said lease or the rights
thereunder without the written consent of Xxxxxx. The User has
furnished this writer with a copy of a Rider to Master Lease No. 3864
which said copy shows to be executed by the User but not Lessor. In
said Rider, additional language to paragraph 15 which provided, in
part, that "Lessee shall have the right to assign this lease without
the prior written consent of the Lessor only to West Texas Utilities of
Abilene, Texas, or Southwestern Public Service Company of Amarillo,
Texas, in connection with a fully executed power supply contract...".
User has furnished this writer with an Agreement dated March 31,1993 by
and between Supplier and the User whereby the User transferred to
Supplier all of its rights, obligations, title, and interest in the
Lease, free and clear of any liens and encumbrances. Together with said
agreement, this writer has been furnished a copy of a Consent to the
assignment of the User's interest in the lease to Supplier, said
Consent shown to be executed by Xxxx Xxxxxxx Mutual Life Insurance
Company. For purposes of this opinion
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 5
this writer has assumed the validity of the signatures thereon and the
authorization for such execution but has not verified the same.
FIRST INTERSTATE BANK OF TEXAS - GUARANTY AGREEMENT:
On February 1, 1993, the User executed and delivered its guaranty of a
promissory note in the principal sum of $7,000,000.00, executed by New
West Fuels, L.C., a Texas limited liability company that is an
affiliate of New West Resources, Inc., a wholly-owned subsidiary of the
User. On December 1, 1993, the User executed and delivered a Restated
Specific Guaranty Agreement guaranteeing a promissory note in the
principal sum of $1,000,000.00 executed by New West Fuels, L.C., a
Texas limited liability company that is an affiliate of New West
Resources, Inc., a wholly-owned-subsidiary of the User. On May 1, 1994,
the User executed and delivered a Second Restated and Amended Specific
Guaranty Agreement guaranteeing a promissory note in the principal sum
of $1,300,000.00 executed by New West Resources, Inc., a wholly-owned-
subsidiary of User. Under the terms of said guaranty agreement, it is
provided that "Guarantor does not intend to incur debts that will be
beyond the Guarantor's ability to pay as such debts mature". This
opinion relies on the decisions and judgment of the User that this
subject transaction will not be beyond the User's ability to pay all
such obligations and is so qualified.
3. I hereby confirm to you that to the Opinion Giver's Actual Knowledge,
there are no actions or proceedings against the User or the Issuer,
pending or overtly threatened in writing, before any court,
governmental agency or arbitrator which (i) seek to affect the
enforceability of the Principal Documents, or (ii) except as disclosed
herein have, or would have if adversely determined, a material adverse
effect on the ability of either the User or the Issuer to perform such
obligations, subject to the following assumptions, limitations,
disclosures, qualifications and exceptions:
LITIGATION OF 1990 POWER SUPPLY AGREEMENT:
As described above, the User filed a Suit for Declaratory Judgment in
the 238th Judicial District Court of Midland County, Texas, requesting
that the 1990 Power Supply Agreement with Texas Utilities Electric
Company be declared unenforceable. The Court found the contract to be
valid and enforceable. This
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 6
District Court's decision was upheld on appeal with the Court of
Appeals, Eighth District of Texas, El Paso, Texas. A decision has was
made not to appeal to the Texas Supreme Court. Therefore, the User will
be required to purchase all its power so contracted from Texas
Utilities Electric Company, until the requisite notice requirements are
met. As stated above, this writer is advised that notices have been
given for the removal of load from the TU Electric system and that a
portion of the load was removed in February 1994, and the remainder of
the load will be removed in 1995. Please see the above discussion for
more details.
TEXAS UTILITIES ELECTRIC COMPANY COUNTERCLAIMS:
In connection with the Suit for Declaratory Judgment (Cause No.
B-38,879) in the 238th Judicial District Court of Midland County,
Texas, described above, Texas Utilities Electric Company (TUEC) filed a
counterclaim which has been severed by the above named Court into cause
No. 39,301. In the counterclaim, TUEC is bringing suit against the User
for (1) Specific Performance of the 1990 Power Supply Agreement, and
(2) breach of contract based upon certain testimony filed by the User
in TUEC's rate case proceeding before the Public Utility Commission of
Texas, Docket No. 11,735. In this suit, TUEC has asked for Specific
Performance; damages in an unspecified amount; pre-judgment and
post-judgment interest, and attorneys fees. This case is currently
pending before the District Court of Midland County, Texas. The User is
being represented by legal counsel, to-wit: Xx. Xxxxx X. Xxxxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxxx & Xxxxxxx, 0000 Xxxx Xxxx, Xxxxxxx, Xxxxx,
00000. Other than the information provided above for disclosure
purposes, this writer is not opining as to this litigation. However,
the earlier discussion made above about the required notices to TUEC
concerning the removal of load from TUEC's system on February 1, 1994
and February 1,1995, pursuant to the terms of the 1990 Power Supply
Agreement should be relevant in considering the effect of this case of
the subject transaction.
4. Except for those which have been obtained by the User and/or the
Issuer, to the best of my knowledge, no consent, approval,
authorization or order of any court or governmental agency or of any
third party is or was required (a) for the execution and delivery by
each of the User and the Issuer of any of the Principal Documents, (b)
for the consummation of the transactions contemplated by the Principal
Documents or (c) for the performance by each of the User and the Issuer
of its obligations thereunder.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 7
The foregoing opinions are further subject to the following assumptions,
limitations, qualifications and exceptions:
A. This Opinion incorporates by reference the following qualifications
and this Opinion should be read in conjunction therewith:
(1) provisions restricting access to courts or to legal or
equitable remedies or purporting to affect the jurisdiction or
venue of courts;
(2) provisions purporting to establish evidentiary standards for
suits or proceedings to enforce the Transaction Documents;
(3) provisions purporting to waive rights to notice, legal
defenses, statutes of limitations, or other benefits that
cannot be waived under applicable law;
(4) provisions granting powers of attorney or authority to execute
documents or to act by power of attorney on behalf of the
Client;
(5) self-help remedies provided for in the Transaction Documents
(other than those remedies available pursuant to an exercise
in accordance with provisions of Section 51.002 of the
Property Code or Chapter 9 of the Texas Business and Commerce
Code;
(6) provisions providing that remedies are cumulative;
(7) provisions that decisions by a party are conclusive;
(8) provisions purporting to provide remedies inconsistent with
the Texas Business and Commerce Code, to the extent the Texas
Business and Commerce Code is application thereto;
(9) provisions purporting to grant or limit rights of third
parties; and
(10) provisions purporting to create a trust or constructive trust
without compliance with applicable trust law.
B. The General Qualifications and the qualifications set forth in
paragraph A above to apply the opinions set forth in paragraphs 1, 2, 3
and 4 above (such portion of paragraph 2 above is referred to as the No
Breach or Default Opinion and the No Violation of Law Opinion).
C. For purposes of the opinion in paragraph 2 above, the Other
Agreements addressed by that opinion are ONLY those contracts listed on
the attached Schedule 2.
Metropolitan Life Insurance Company
Metropolitan Insurance and Annuity Company
Metropolitan Property and Casualty Insurance Company
Texas Commerce Bank National Association, as Indenture Trustee
November 9, 1994
Page 8
D. I express no opinion as to any aspects of (i) the Public
Utility Regulatory Act, Tex. Rev. Civ. Stat. Xxx. art 1446c, (ii) the
Public Utility Holding Company Act of 1935, (iii) the Federal Power
Act, or (iv) any laws pertaining to local authorities, whether
municipalities, counties, special purpose districts, or otherwise.
E. I express no opinion as to any aspects of any of the Principal
Documents other than as expressly set forth in this Opinion Letter.
The opinion herein expressed is solely for the benefit of the Purchaser and the
Indenture Trustee, as trustee for the Holders, and may be used or relied upon
only by the Purchaser, the Indenture Trustee, the Holders or by Xxxxxxxx &
Xxxxxx, a Professional Corporation, to the extent authorized by the Accord, and
not for any other purpose without in each instance my prior written consent,
provided, however, Xxxxxxxx & Xxxxxx may rely upon the opinions in connection
with any opinion delivered by them to the Purchaser.
Respectfully submitted,
XxXXXXX & LYON, P.C.
By:
-----------------------------------
Xxxxxx X. Xxxx
SCHEDULE 1 TO APPENDIX D-4
SECTION I. PRINCIPAL DOCUMENTS
1. The Amendment.
2. The Transaction Agreement, as amended by the Amendment.
3. The Note Purchase Agreement, as amended by the Amendment.
4. The User's Guaranty, as amended by the Amendment.
5. The Trust Indenture, as amended by the Amendment.
6. The Transmission Agreement, as amended by the Amendment.
SECTION II. CORPORATE DOCUMENTS
AND PROCEEDINGS
7. Certificate of the President and the Chief Financial Officer of the
Issuer of even date herewith, with respect to
(a) Representations and Warranties made by the Issuer in Article
VII of the Amendment.
(b) Incumbency and specimen signatures of the signing officers of
the Issuer.
(c) Resolutions adopted by the Board of Director of the Issuer.
8. Certificate of the President and the Chief Financial Officer of the
User of even date herewith, with respect to
(a) Representations and Warranties made by the User in Article IV
of the Amendment.
(b) Incumbency and specimen signatures of the signing officers of
the User.
(c) Resolutions adopted by the Board of Director of the User.
