EXHIBIT 10.5
Between
KANSAS ELECTRIC POWER COOPERATIVE, INC.
and
ALEX. XXXXX & SONS INCORPORATED
Dated as of December 20, 1996
RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (KEPCO) SERIES 1997
RURAL ELECTRIC COOPERATIVE GRANTOR TRUST CERTIFICATES
SERIES 1997
This dated as of December 20, 1996
(the "Agreement" or the ""), is entered into by and between
KANSAS ELECTRIC POWER COOPERATIVE, INC., a Kansas non-profit electric generation
and transmission cooperative corporation (the "Cooperative"), and ALEX. XXXXX &
SONS INCORPORATED, as remarketing agent (the "Remarketing Agent").
W I T N E S S E T H:
WHEREAS, in 1988 the Cooperative prepaid certain of its loans from the
Federal Financing Bank, which were guaranteed by the United States of America,
acting through the Administrator (the "Administrator") of the Rural
Electrification Administration of the Department of Agriculture (which has been
succeeded with respect to the administration of certain electric and telephone
loan programs by the Rural Utilities Service, an agency of the United States
Department of Agriculture established pursuant to Section 232 of the Federal
Cooperative Insurance Reform and Department of Agriculture Reorganization Act of
1994 (Pub.L. 103-354, 108 Stat. 3178) (together with its successors, the
"RUS")), with amounts borrowed from the National Rural Utilities Cooperative
Finance Corporation, a District of Columbia cooperative association (together
with its successors, "CFC"), pursuant to a Loan Agreement dated as
February 15, 1988 between CFC and the Cooperative (the "Original Loan Agreement"
and, as amended by the First Amendment to Loan Agreement dated as of the date
hereof and effective as of the Refinancing Date referred to below and as further
amended and supplemented from time to time in accordance with the terms thereof
and hereof, the "Loan Agreement");
WHEREAS, CFC established the Rural Electric Cooperative Grantor Trusts
(KEPCO) Series 1988 K1-1988 K3 (collectively, the "Original Trusts") for the
purpose of holding the notes (the "Original Notes") evidencing the Cooperative's
repayment obligations under the loan (the "1988 Loan") made by CFC to the
Cooperative pursuant to the Original Loan Agreement, which obligations were
guaranteed by the United States of America acting through the Administrator of
the RUS (as amended and supplemented from time to time in accordance with the
terms thereof and hereof, the "Guarantee");
WHEREAS, pursuant to Section 3.9 of the Loan Agreement, and with the
consent of CFC as Servicer of the Original Trusts (CFC in such capacity, the
"Servicer"), the Original Notes may be purchased prior to stated maturity; and
WHEREAS, the Cooperative has notified the trustee under the Original Trusts
that, with the approval of the Administrator, it desires that CFC purchase the
Notes (as defined in the Trust Agreement described below) and the Trustee redeem
the related certificates of beneficial interest therein and terminate the
related Original Trusts on the Refinancing Date (as defined in the Trust
Agreement described below), for the purpose of amending certain terms of the
1988 Loan and the Notes, depositing the Notes in a new trust created pursuant to
the Trust Agreement referred to below and issuing certificates of beneficial
interest therein (as amended and supplemented in accordance with the terms
thereof and hereof, the "Certificates"); and
WHEREAS, CFC, as lender under the Loan Agreement, depositor of the Original
Trusts and servicer of the Notes, has agreed to purchase the Notes (as amended
as provided above) and to cause the Notes, with the Guarantee endorsed thereon,
to be delivered to the Trustee (as defined below) on the Refinancing Date for
deposit in the Rural Electric Cooperative Grantor Trust (KEPCO) Series 1997
created pursuant to the Trust Agreement dated as of the date hereof and
effective as of the Refinancing Date (as amended and supplemented from time to
time in accordance with the terms thereof and hereof, the "Trust Agreement")
among CFC, the Cooperative and The First National Bank of Chicago, as trustee
(together with its successors, the "Trustee"); and
WHEREAS, the Board of Directors of the Cooperative has determined that it
is desirable for the Cooperative to enter into the Swap Agreement (as defined in
the Trust Agreement) with the Swap Provider (as defined in the Trust Agreement),
which will be assigned to the Trust automatically on the Refinancing Date,
pursuant to which the Swap Provider will pay to the Trustee a variable rate of
interest and the Trustee will pay a fixed rate of interest; and
WHEREAS, the Cooperative will enter into the Liquidity Facility in respect
of the Certificates; and
WHEREAS, pursuant to, but subject to the terms and conditions of, the
Underwriting Agreement (as defined in the Trust Agreement), on the Refinancing
Date the Certificates will be sold by CFC; and
WHEREAS, the Cooperative desires to appoint (with the consent of the Swap
Provider) Alex. Xxxxx & Sons Incorporated to serve as the Remarketing Agent with
respect to Certificates tendered under the Trust Agreement, all upon the terms
and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and the purchase of the Certificates by all who shall at any
time and from time to time
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become registered owners thereof, the parties hereto covenant and agree as
follows:
Section 1. Terms Defined. In addition to words or terms elsewhere
defined in this , terms used herein which are capitalized
but not defined herein shall have the meanings prescribed for them in the Trust
Agreement unless the context shall clearly otherwise indicate.
Section 2. Appointment of Remarketing Agent; Responsibilities of
Remarketing Agent.
(a) Subject to the terms and conditions contained herein and in the Trust
Agreement, the Cooperative hereby appoints Alex. Xxxxx & Sons Incorporated, and
Alex. Xxxxx & Sons Incorporated hereby accepts such appointment, as exclusive
remarketing agent (i) in connection with offering and sale (a "remarketing") of
the Certificates from time to time in the secondary market subsequent to the
initial offering, issuance and sale of the Certificates, and (ii) in connection
with the establishment of the Weekly Rate and the Flex Rate (collectively
referred to herein as the "Variable Rate") to be borne by the Certificates, all
as provided in the Trust Agreement.
(b) Alex. Xxxxx & Sons Incorporated hereby accepts and agrees to the
obligations and duties of the Remarketing Agent set forth in the Trust
Agreement, including but not limited to the obligation to determine the Variable
Rate to be borne by the Certificates in accordance with the Trust Agreement.
The Remarketing Agent agrees to keep such books and records as shall be
consistent with prudent industry practice and to make such books and records
available for inspection by the Cooperative, the Trustee, the Swap Provider, the
Liquidity Provider and the Servicer at all reasonable times. The Remarketing
Agent agrees to perform its duties hereunder using due diligence and in good
faith to the best of its abilities.
Section 3. Exclusive Agent for Remarketing.
(a) The Cooperative agrees that so long as this
shall remain in effect, the Remarketing Agent shall have the sole and exclusive
right to remarket the Certificates as agent for, and on behalf of, the
Certificateholders in the manner and on the terms and conditions hereinafter
provided for.
(b) It is understood and agreed by all parties hereto that the Remarketing
Agent is only obligated hereunder to use its best efforts to remarket any
Certificates tendered or deemed tendered for purchase ("Tendered Certificates")
or any Certificates held by or on behalf of the Liquidity Provider and shall in
no way be obligated to advance its own funds to purchase any Tendered
Certificates or any such Certificates held by or on behalf of the
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Liquidity Provider. The Remarketing Agent shall be construed to be acting as
agent only for and on behalf of the Certificateholders, including the Liquidity
Provider if, as and when it is a Certificateholder.
Section 4. The Certificates and the Trust Agreement. The Certificates
will be issuable having the terms described in, and will be subject to the
conditions of, the Trust Agreement. The Cooperative shall promptly notify the
Remarketing Agent in the event the Trust Agreement is repealed, amended,
modified or supplemented subsequent to the date hereof; provided that the Trust
Agreement shall not be repealed, amended, modified or supplemented, and the
Cooperative shall not agree to repeal, amend, modify or supplement the Trust
Agreement, without the Remarketing Agent's consent if such repeal, amendment,
modification or supplement would alter the Remarketing Agent's obligations or
duties or would adversely affect the Remarketing Agent. The Cooperative, CFC
and the Trustee will execute and deliver the Trust Agreement in the form
presented to the Remarketing Agent on the date of execution of this .
Section 5. Furnishing of Offering Materials.
(a) The Cooperative agrees to furnish the Remarketing Agent with as many
copies as the Remarketing Agent may reasonably request of the Prospectus
relating to the Certificates (the "Offering Statement"), and such other
information with respect to the Cooperative, the Trust, CFC, the Liquidity
Provider, the Swap Provider, Xxxxxx, the Notes, the Guarantee and the
Certificates as the Remarketing Agent shall reasonably request from time to time
and as shall be available to the Cooperative.
(b) If, at any time during the term of this , any
event known to the Cooperative relating to or affecting the Cooperative, the
Trust Agreement, the Trust, CFC, Xxxxxx, the Swap Provider, the Liquidity
Provider, the Notes, the Guarantee, the Liquidity Protection Agreement, the
Liquidity Facility, the Swap Agreement or the Certificates shall occur which
might affect the correctness or completeness of any statement of a material fact
contained in the Offering Statement or which might result in the Offering
Statement containing an untrue, incorrect or misleading statement of a material
fact or omitting to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, the Cooperative will promptly notify the Remarketing Agent
in writing of the circumstances and details of such event.
(c) If at any time, in the opinion of the Remarketing Agent, any event
occurs as a result of which the Offering Statement would include an untrue
statement of a material fact, or omit to state
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any material fact necessary in order to make statements therein, in light of the
circumstances under which they were made, not misleading, the Cooperative will,
upon the request of the Remarketing Agent and at the expense of the Cooperative,
prepare an amendment or supplement which will correct such statement or
omission.
(d) The Cooperative will cooperate with the Remarketing Agent in the
preparation of any additional remarketing materials reasonably required in
connection with the remarketing of any Certificates. The Cooperative
acknowledges that the Remarketing Agent may limit the manner in which
Certificates are remarketed and may limit its remarketing efforts to certain
potential purchasers, in each case as and to the extent the Remarketing Agent
deems necessary or appropriate under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and, if applicable, the Trust
Indenture Act of 1939, as amended, the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
Section 6. Representations, Warranties, Covenants and Agreements of the
Cooperative. The Cooperative represents, warrants, covenants and agrees with
the Remarketing Agent as follows:
(a) The Cooperative hereby makes for the benefit of the Remarketing Agent
the representations, warranties, covenants and agreements contained in Section
4(a) of the Underwriting Agreement as if such representations, warranties,
covenants and agreements were herein set forth in the entirety. Without
limiting the foregoing, this has been duly authorized,
executed and delivered by the Cooperative and constitutes the legal, valid and
binding obligation of the Cooperative enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other laws
affecting generally the enforcement of creditors' rights and by equitable
principles.
(b) The Cooperative will cooperate with the Remarketing Agent in the
qualification of the Certificates for remarketing and the determination of the
eligibility of the Certificates for investment under the laws of such
jurisdictions as the Remarketing Agent shall designate and will use its best
efforts to continue any such qualification in effect so long as required for the
remarketing of the Certificates by the Remarketing Agent, provided that the
Cooperative shall not be required to register as a broker-dealer in any
jurisdiction or consent to service of process in any jurisdiction other than the
State of Kansas.
(c) Any certificate authorized by the Cooperative, signed by any officer
of the Cooperative and delivered to the Remarketing
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Agent shall be deemed a representation by the Cooperative to the Remarketing
Agent as to the statements made therein.
Section 7. Representations, Warranties, Covenants and Agreements of the
Remarketing Agent. The Remarketing Agent, by its acceptance hereof, represents,
warrants and covenants to and with the Cooperative that:
(a) It is authorized by law to perform all the duties imposed upon it by
the Trust Agreement and this and that it is a member of
the National Association of Securities Dealers, Inc. having a capitalization of
at least $15,000,000.
(b) This Remarketing Agreement has been duly authorized, executed and
delivered by the Remarketing Agent and constitutes the legal, valid and binding
obligation of the Remarketing Agent enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other laws
affecting generally the enforcement of creditors' rights and by equitable
principles.
Section 8. Conditions to Effectiveness. Provided that the Remarketing
Agent shall have received an executed letter, substantially in the form attached
hereto as Exhibit A, from the Trustee and Tender Agent, this Agreement shall
become effective on the date (the "Effective Date") on which Alex. Xxxxx & Sons
Incorporated purchases the Certificates pursuant to the Underwriting Agreement.
This Agreement shall not become effective if Alex. Xxxxx & Sons Incorporated
does not purchase the Certificates pursuant to the Underwriting Agreement.
Section 9. Conditions to Remarketing Agent's Obligations.
(a) The obligations of the Remarketing Agent under this Remarketing
Agreement have been undertaken in reliance on, and shall be subject to, the due
performance by the Cooperative of its obligations and agreements to be performed
hereunder and under the Related Documents (as defined in the Underwriting
Agreement) and to the accuracy of and compliance with the representations,
warranties, covenants and agreements contained herein and therein, on and as of
the date of delivery of this Remarketing Agreement and on and as of each date on
which Certificates are to be remarketed pursuant to this Remarketing Agreement.
(b) The obligations of the Remarketing Agent hereunder with respect to
each date on which Certificates are to be remarketed pursuant to this
Remarketing Agreement and the Trust Agreement are also subject, at the
discretion of the Remarketing Agent, to the following further conditions:
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(i) At or prior to the Closing Date (as defined in the Underwriting
Agreement), the Remarketing Agent shall have received all documents required by
and delivered pursuant to the Underwriting Agreement;
(ii) Each of the Related Documents (as defined in the Underwriting
Agreement) shall be in full force and effect and shall not have been amended,
modified or supplemented in any way which would cause the Guarantee to become
unenforceable in whole or in part;
(iii) There shall be in full force and effect all such registration
statements, offering materials, opinions and other filings or documents as may
be necessary in the reasonable opinion of the Remarketing Agent to effect a
remarketing of the Certificates in the manner contemplated by this Remarketing
Agreement and in compliance with all requirements imposed upon the Cooperative,
the Trust or the Remarketing Agent by the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and, if applicable, the Trust
Indenture Act of 1939, as amended;
(iv) None of the events described in Section 12(i), (ii), (iii), (iv) or
(v)(A), (D), (E) or (I) of the Underwriting Agreement shall have occurred after
the Refinancing Date and shall be continuing;
(v) The obligations of the Liquidity Provider under the Liquidity Facility
(or Alternative Liquidity Facility if an Alternative Liquidity Facility replaced
the Liquidity Facility) shall not have been suspended (including as a result of
the nonsatisfaction of a condition precedent to, or the existence of any fact or
circumstance which effectively tolls, the performance of such obligations) or
terminated;
(vi) The obligations of Xxxxxx Guaranty Trust Company of New York under the
Liquidity Protection Agreement shall not have been suspended (including as a
result of the nonsatisfaction of a condition precedent to, or the existence of
any fact or circumstance which effectively tolls, the performance of such
obligations) or terminated;
(vii) The obligations of the Swap Provider under the Swap Agreement shall
not have been suspended (including as a result of the nonsatisfaction of a
condition precedent to, or the existence of any fact or circumstance which
effectively tolls, the performance of such obligations) or terminated; and
(viii) The Guarantee shall be in full force and effect, and shall not have
been cancelled or terminated, or amended or modified in any material respect,
and neither the
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Administrator nor any other Federal governmental authority or official with
competent jurisdiction shall have claimed or asserted in writing, or shall have
failed to contest any claim or assertion made in any action or proceeding, or
any governmental authority with competent jurisdiction shall have announced,
found or ruled, that the Guarantee is null and void or otherwise invalid or
unenforceable against the United States of America, either in whole or part.
Section 10. Dealing in Certificates by Remarketing Agent. The Remarketing
Agent, either as principal or agent, may, in good faith, buy, sell, own, hold
and deal in any of the Certificates and may engage in any action which any
Certificateholder may be entitled to take with like effect as if it did not act
in any capacity hereunder. The Remarketing Agent, in its individual capacity,
either as principal or agent, may also engage in or be interested in any
financial or other transaction with the Cooperative and may act as depositary,
trustee or agent for any committee or body of Certificateholders or other
obligations of the Cooperative as freely as if it did not act in any capacity
hereunder.
Section 11. Intention of Parties. It is the express intention of the
parties hereto that no purchase, sale or transfer of any Certificates, as herein
provided, shall constitute or be construed to be the extinguishment, merger or
discharge of any Certificates or the indebtedness evidenced thereby or the
reissuance of any Certificates or the refunding of any indebtedness represented
thereby.
Section 12. Term and Termination of the Remarketing Agreement.
(a) This Remarketing Agreement shall become effective on the Effective
Date and shall continue in full force and effect until the earlier to occur of
(i) the first day on which no Certificates are outstanding, (ii) December 15,
2017, (iii) the date on which the Remarketing Agent dissolves or admits in
writing that it is insolvent or unable to pay its obligations as they become
due, (iv) the date on which the Remarketing Agent files a voluntary petition
seeking relief under applicable bankruptcy or similar laws, (v) the earlier of
(x) the 45th day after the date on which an involuntary petition seeking relief
under applicable bankruptcy or similar law is filed against the Remarketing
Agent if such involuntary petition is not dismissed on or before such 45th day
and (y) the date of entry of an order for relief with respect to such
involuntary petition, or (vi) the termination of this Agreement pursuant to
subparagraph (b) of this Section.
(b) At any time, the Remarketing Agent may resign and be discharged of its
duties hereunder by giving at least 30 days'
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prior written notice to the Cooperative, the Servicer, the Swap Provider, the
Liquidity Provider, the Trustee and the Tender Agent. If at any time there is no
Swap Agreement or Alternative Swap Agreement in force and effect, the
Cooperative shall have the right to terminate this Agreement by delivering
written notice thereof (a "Termination Notice") to the Remarketing Agent;
provided that the Cooperative shall have no right to so terminate this Agreement
unless, no later than the date of termination, the Remarketing Agent shall have
received all fees and expenses owed to it under this Agreement (including a pro
rata amount of the fee described in Section 13(a) accrued through the
termination date if the termination date does not fall on the last Business Day
of June or December). The Termination Notice shall refer to this Agreement and
this Section 12(b), state that the Cooperative is terminating this Agreement
pursuant to Section 12(b), and certify that there is no Swap Agreement or
Alternative Swap Agreement in force and effect; subject to the Remarketing
Agent's having received all fees and expenses referred to in the immediately
preceding sentence, such termination shall be effective on the date on which the
Remarketing Agent receives the Termination Notice. Unless a Swap Provider
Default shall have occurred and be continuing, from and after six (6) months
after the Refinancing Date, the Remarketing Agent may be removed or replaced,
for lack of performance, by not less than 30 days' prior written notice signed
by the Swap Provider delivered to the Remarketing Agent.
For all purposes of the foregoing, if the Certificates are in a Weekly Rate
Mode there shall not be lack of performance by the Remarketing Agent unless the
average Variable Rate on the Certificates during a consecutive 4 month period
pursuant to this Agreement shall be in excess of the corresponding average of
the Base Rate (as defined below) plus the Applicable Margin (as defined below)
during such 4 month period. The "Base Rate" means the bond equivalent of the 30
day rate on commercial paper placed on behalf of issuers whose corporate bonds
are rated AA by Standard & Poor's or its successor, or the equivalent of such
rating by another rating agency as made available on a discount basis or
otherwise by the Federal Reserve Bank of New York (H.15) for the nearest
business day prior to such Variable Rate setting date. The "Applicable Margin"
for such Base Rate shall be determined based on the rating (using S&P or its
successor, or the equivalent of such rating by another rating agency) of the
Liquidity Provider under the Liquidity Facility in effect as of the date on
which the Variable Rate is determined:
Applicable Margin Liquidity Provider Rating
11 basis points At least long term Aa3 and AA-, short term P-1 and A-1+
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15 basis points At least long term Aa3 and AA-, short term P-1 and A-1
17 basis points At least long term A2 and A, short term P-1 and A-1
The foregoing is based on the Certificates being rated at least Aa/AA by Moody's
and Standard & Poor's, respectively. If the rating of the Certificates falls
below those levels, the Cooperative and Remarketing Agent will negotiate in good
faith to determine, with the Swap Provider's consent, the appropriate Applicable
Margin based upon such lower rating.
If there are limitations on the ability or advisability of the purchase of
Certificates by any "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act, then each Applicable Margin described
above shall be increased by 5 basis points.
If (i) the Certificates are in the Flex Rate Mode, (ii) the Certificates
are sold to the Underwriter in a private placement rather than in a registered
public offering, (iii) the short-term ratings on the Certificates shall have
been withdrawn or downgraded below A-1 or P-1 by Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc. or Xxxxx'x Investors Service,
respectively, or (iv) the Liquidity Provider purchases unremarketed Certificates
pursuant to Section 9.3(i) of the Trust Agreement, then in each such case the
Cooperative and Remarketing Agent will negotiate in good faith, with the Swap
Provider's consent, to determine an appropriate Applicable Margin or other
reasonable measure of lack of performance for purposes of this Section.
(c) In the event of the removal or resignation of the Remarketing Agent,
the Remarketing Agent shall pay over, assign and deliver any moneys or Tendered
Certificates held by it in such capacity to its successor or, if there is no
successor, to the Trustee.
Section 13. Payment of Fees and Expenses of Remarketing.
(a) The Cooperative agrees to pay (or to cause the Swap Provider to pay
to) the Remarketing Agent, as a fee for acting as Remarketing Agent under and
pursuant to this Remarketing Agreement, a sum equal to one-eighth of one percent
(0.125%) on an annualized basis of the average outstanding principal amount of
the Certificates payable in arrears on the last Business Day of June and
December of each year, commencing in June 1998, for each year or part year that
the Remarketing Agent performs such services hereunder, such sum to be paid
regardless of the principal amount of Certificates remarketed pursuant hereto.
The parties contemplate that such fee will be paid to the Remarketing Agent by
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the Swap Provider as described in the letter agreement, dated as of the date
hereof, among the Remarketing Agent, the Cooperative and the Swap Provider;
provided that the Cooperative shall remain obligated to make such payment in the
event the Swap Provider fails for any reason to pay the Remarketing Agent.
(b) Commencing on the effective date of this Agreement, the Cooperative
shall pay or reimburse the Remarketing Agent for reasonable expenses incurred in
the preparation of any revisions, supplements or additions to the Offering
Statement necessary to effect the remarketing of Certificates, including fees
and expenses (if any) of nationally recognized bond counsel, securities counsel,
special tax counsel, counsel to the Remarketing Agent or other counsel, blue sky
fees and expenses (including attorneys' fees and expenses with respect thereto),
costs of printing, rating, accounting, feasibility studies and other similar
costs.
Section 14. Indemnification.
(a) To the extent permitted by law, the Cooperative agrees to indemnify
and hold harmless the Remarketing Agent and its officers, directors, agents and
employees (collectively, the "Indemnified Person") from and against any losses,
claims, damages or liabilities to which any Indemnified Person may become
subject insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Offering Statement
or other information provided by the Cooperative pursuant to Section 5 hereof,
or arise out of, or are based upon, the omission or alleged omission to state
therein, in the light of the circumstances under which they were made, not
misleading, and will reimburse each Indemnified Person for any legal or other
expenses reasonably incurred by such Indemnified Person in investigating,
defending or preparing to defend any such action or claim; provided, however,
that the Cooperative shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Offering Statement in reliance upon and in conformity with written
information furnished to the Cooperative by or on behalf of any Indemnified
Person specifically for use in preparation of the Offering Statement. The
Cooperative acknowledges that the statements to be under the caption
"Underwriting" in the Offering Statement constitute the only information to be
furnished in writing by or on behalf of the Indemnified Persons for use in
preparation of the Offering Statement. The indemnity agreement in this
paragraph shall be in addition to any liability which the Cooperative may
otherwise have to any Indemnified Person and shall extend upon the same terms
and conditions to each person, if any, who controls any Indemnified
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Person within the meaning of the Securities Exchange Act of 1934, as amended.
(b) To the extent permitted by law, the Remarketing Agent agrees to
indemnify and hold harmless the Cooperative and its commissioners, officers,
directors, agents and employees to the same extent as the indemnity from the
Cooperative to the Indemnified Persons described in paragraph (a) of this
Section but only with respect to information relating to the Remarketing Agent
to be furnished in writing by it, or on its behalf, specifically for use in
preparation of the Offering Statement. The Cooperative acknowledges that the
statements to be under the caption "Underwriting" in the Offering Statement
constitute the only information to be furnished in writing by or on behalf of
the Remarketing Agent for use in preparation of the Offering Statement. The
indemnity agreement in this paragraph shall be in addition to any liability
which the Remarketing Agent may otherwise have to the Cooperative and shall
extend upon the same terms and conditions to each person, if any, who controls
the Cooperative, within the meaning of the Securities Exchange Act of 1934, as
amended.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 14, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
14(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 14(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 14(a) or (b). In case
any such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing,
the indemnifying party shall pay as incurred the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
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party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the Remarketing
Agent in the case of parties indemnified pursuant to Section 14(a) and by the
Cooperative and in the case of parties indemnified pursuant to Section 14(b).
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Section 14 is unavailable
to or insufficient to hold harmless an indemnified party under Section 14(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Cooperative on the one hand and the
Remarketing Agent (in its capacity as Underwriter) on the other from the
offering of the Certificates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 14(c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Cooperative and the
Remarketing Agent in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Cooperative and the Remarketing Agent shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by CFC bear to the Underwriting Fee
received by the Underwriter, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue and alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Cooperative or the Remarketing Agent and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
13
The Cooperative and the Remarketing Agent agree that it would not be just
and equitable if contributions pursuant to this Section 14(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 14(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 14(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) the Remarketing Agent (including in its
capacity as Underwriter) shall not be required to contribute any amount in
excess of the Underwriting Fee and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of
1933, as amended) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) In any proceeding relating to the Offering Statement or any supplement
or amendment thereto, each party against whom contribution may be sought under
this Section 14 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process issuing from
such court may be served upon him or it by any other contributing party and
consents to the service of such process and agrees that any other contributing
party may join him or it as an additional defendant in any such proceeding in
which such other contributing party is a party. The Cooperative agrees to
indemnify and hold harmless the Remarketing Agent and each person, if any, who
controls the Remarketing Agent against any and all losses, claims, damages and
liabilities (i) arising out of any untrue statement or alleged untrue statement,
of a material fact contained in the Offering Statement or any amendment or
supplement thereto as the same has been supplemented or amended, or the
omission, or alleged omission, therefrom of a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except any such statements as were based on information
furnished to the Cooperative by the Remarketing Agent (the Cooperative making
those acknowledgments set forth in Section 14(a) above, and (ii) to the extent
of the aggregate amount paid in settlement of any litigation arising from a
claim based upon the foregoing and such settlement is effected with the written
consent of the Cooperative.
(f) The indemnity agreements contained in this Section shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Remarketing Agent or the Cooperative, or the delivery of and
any payment for any Certificates hereunder, and shall survive the termination or
cancellation of this Remarketing Agreement.
14
Section 15. Remarketing Agent's Liabilities. The Remarketing Agent shall
incur no liability to the Cooperative or any other party for its actions as
Remarketing Agent pursuant to the terms hereof and of the Trust Agreement except
for its negligence or willful misconduct and except as otherwise specifically
provided herein. The Remarketing Agent will not be liable to the Cooperative on
account of the failure of any person to whom the Remarketing Agent has sold a
Certificate to pay for it or to deliver any document in respect of such sale.
The undertaking of the Remarketing Agent to remarket any Certificates pursuant
hereto or to the Trust Agreement shall be on a "best efforts" basis as described
in this Agreement.
Section 16. Events of Default. The failure by the Cooperative to make any
payment required by this Remarketing Agreement when due shall constitute an
"event of default" hereunder and shall entitle the Remarketing Agent to take
whatever action at law or in equity, including specific performance, that is
necessary or desirable to collect the amounts then due and thereafter to become
due to them or to enforce observance or performance of any covenant, condition
or agreement of the Cooperative hereunder.
Section 17. Miscellaneous.
(a) Except as otherwise provided, any notice or other communication herein
required or permitted to be given shall be in writing, by telex or facsimile
transmission, and may be personally served or sent by United States mail and
shall be deemed to have been given upon receipt by the party notified. For the
purposes hereof, the address and principal office of the parties hereto and of
the Trustee, the Tender Agent, the Liquidity Provider, the Servicer and the Swap
Provider (until notice of a change thereof is delivered as provided in this
Section 16) shall be as follows:
Remarketing Agent: Alex. Xxxxx & Sons Incorporated
1290 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Variable Rates Department
Fax: 000-000-0000
Cooperative: Kansas Electric Power Cooperative, Inc.
X.X. Xxx 0000
Xxxxxx, Xxxxxx 00000
Attention: Executive Vice President
Fax: 913/000-0000
15
Liquidity Provider: To the Liquidity Provider at the address set forth in the
Liquidity Facility; provided that if such address has not
been provided to the Remarketing Agent, such notice may
be sent to the Xxxxxx Guaranty Trust Company of New York
at the address set forth next to the Swap Provider.
Swap Provider: Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Swaps Unit
Fax: (000) 000-0000
Servicer: National Rural Utilities Cooperative Finance Association
0000 Xxxxxxxxxxx Xxx-Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Trustee: The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Tel: (000) 000-0000
Fax: (000) 000-0000
Tender Agent: The First National Bank of Chicago
c/o First Chicago Trust Company of New York
00 Xxxx Xxxxxx
0xx Xxxxx - Window 0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Fax: (000) 000-0000
The Remarketing Agent, the Trustee, the Tender Agent, the Liquidity Provider,
the Swap Provider and the Cooperative may, by notice given under this
Remarketing Agreement, designate other addresses to which notices or other
communications shall be directed.
(b) The obligations of the respective parties hereto may not be assigned
or delegated to any other person without the consent of the other party hereto
and the Swap Provider. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns, and will not confer any rights upon any other person other than the
Swap Provider as and to the extent provided herein and other persons, if
16
any, controlling the Cooperative and the Remarketing Agent within the meaning of
the Securities Exchange Act of 1934, as amended. The terms "successors" and
"assigns" shall not include any purchaser of any of the Certificates merely
because of such purchase.
(c) All of the representations, warranties and covenants made in this
Remarketing Agreement shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any party hereto,
delivery of any payment of any Certificates hereunder or termination or
cancellation of this Remarketing Agreement.
(d) Section headings have been inserted in this Remarketing Agreement as a
matter of convenience of reference only, and it is agreed that such headings are
not a part of this Remarketing Agreement and will not be used in the
interpretation of any provisions of this Remarketing Agreement.
(e) If any provision of this Remarketing Agreement shall be held or deemed
to be or shall, in fact, be invalid, inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions because it conflicts with any provisions of any constitution,
statute, published regulation, ruling or court decision, or for any other
reason, such circumstances shall not have the effect of rendering the provision
in question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering any other provisions of this Remarketing Agreement
invalid, inoperative or unenforceable to any extent whatever.
(f) This Remarketing Agreement may be executed in several counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same document.
(g) The terms of this Remarketing Agreement shall not be waived, altered,
modified, amended or supplemented in any manner whatsoever except by written
instrument signed by the parties hereto.
(h) This Remarketing Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(i) The Cooperative agrees that the Remarketing Agent may use the name of
the Cooperative in any advertising the Remarketing Agent may wish to publish
concerning the role of the Remarketing Agent as Underwriter or Remarketing Agent
for the Certificates.
17
IN WITNESS WHEREOF, the Cooperative and the Remarketing Agent have caused
this Remarketing Agreement to be signed in their names by the undersigned
officers, thereto duly authorized, all as of the date and year first above
written.
KANSAS ELECTRIC POWER COOPERATIVE, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Executive Vice President & Chief
Executive Officer
ALEX. XXXXX & SONS INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Title: Managing Director
18
EXHIBIT A
FORM OF TRUSTEE'S AND
TENDER AGENT'S LETTER
[Dated the Effective Date]
Alex. Xxxxx & Sons Incorporated
1290 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Variable Notes Department
Re: Remarketing Agreement dated as of [date] between Kansas Electric
Cooperative, Inc. and Alex. Xxxxx & Sons Incorporated (as amended from time
to time, the "Agreement")
Gentlemen:
We refer to the above-referenced Agreement. Terms used herein and not
otherwise defined herein are used herein as defined in (or incorporated by
reference in) the Agreement.
We hereby agree to enforce the provisions of the Trust Agreement for your
benefit to the extent applicable. The undersigned, in its capacity as Trustee
and Tender Agent, further agrees to perform its obligations under the Trust
Agreement.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee and as Tender Agent
By:
----------------------------------------
Title:
A-1
