EXHIBIT 4(e)
LOAN AGREEMENT
(1998 Series C)
between
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE COUNTY OF APACHE
and
TUCSON ELECTRIC POWER COMPANY
Dated as of March 1, 1998
Relating To
Industrial Development Revenue Bonds,
1998 Series C
(Tucson Electric Power Company Project)
TABLE OF CONTENTS*
Page
LOAN AGREEMENT ............................................. 1
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions............................... 1
SECTION 1.02. Incorporation of Certain Definitions by
Reference................................ 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of the
Authority................................ 4
SECTION 2.02. Representations and Warranties of the
Company.................................. 4
ARTICLE III
THE FACILITIES
SECTION 3.01. Facilities; Property of the Company....... 5
SECTION 3.02. Revision of Plans and Specifications...... 5
SECTION 3.03. Maintenance of Facilities; Remodeling..... 5
SECTION 3.04. Insurance................................. 6
SECTION 3.05. Condemnation.............................. 6
ARTICLE IV
ISSUANCE OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS
OF THE BONDS
SECTION 4.01. Issuance of the Bonds..................... 6
SECTION 4.02. Issuance of Other Obligations............. 6
SECTION 4.03. The Loan; Disposition of Bond Proceeds.... 6
SECTION 4.04. Investment of Moneys in Funds and Accounts 6
ARTICLE V
LOAN PAYMENTS; OTHER OBLIGATIONS
SECTION 5.01. Loan Payments............................. 6
SECTION 5.02. Payments Assigned; Obligation Absolute.... 7
SECTION 5.03. Payment of Expenses....................... 7
SECTION 5.04. Indemnification........................... 7
SECTION 5.05. Payment of Taxes; Discharge of Liens...... 7
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.01. Maintenance of Corporate Existence........ 8
SECTION 6.02. Permits or Licenses....................... 9
SECTION 6.03. Authority's Access to Facilities.......... 9
SECTION 6.04. Tax-Exempt Status of Interest on Bonds.... 9
SECTION 6.05. Use of Facilities......................... 10
SECTION 6.06. Financing Statements...................... 10
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
SECTION 7.01. Conditions................................ 10
SECTION 7.02. Instrument Furnished to the Authority and
Trustee.................................. 11
SECTION 7.03. Limitation................................ 12
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default......................... 12
SECTION 8.02. Force Majeure............................. 12
SECTION 8.03. Remedies.................................. 13
SECTION 8.04. No Remedy Exclusive....................... 13
SECTION 8.05. Reimbursement of Attorneys' and Agents'
Fees..................................... 13
SECTION 8.06. Waiver of Breach.......................... 13
ARTICLE IX
REDEMPTION OF BONDS
SECTION 9.01. Redemption of Bonds....................... 13
SECTION 9.02. Compliance with the Indenture............. 14
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Term of Agreement........................ 14
SECTION 10.02. Notices.................................. 14
SECTION 10.03. Parties in Interest...................... 14
SECTION 10.04. Amendments............................... 14
SECTION 10.05. Counterparts............................. 14
SECTION 10.06. Severability............................. 15
SECTION 10.07. Governing Law............................ 15
SECTION 10.08. Notice Regarding Cancellation of
Contracts............................... 15
Signatures.................................................... 18
Exhibit A - Description of the Facilities..................... A-1
* This table of contents is not part of the Loan Agreement, and is for
convenience only. The captions herein are of no legal effect and do not
vary the meaning or legal effect of any part of the Loan Agreement.
LOAN AGREEMENT
THIS LOAN AGREEMENT (1998 Series C), dated as of March 1, 1998 (this
"Agreement"), between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF
APACHE, an Arizona nonprofit corporation designated by law as a political
subdivision of the State of Arizona (hereinafter called the "Authority"),
and TUCSON ELECTRIC POWER COMPANY, a corporation organized and existing
under the laws of the State of Arizona (hereinafter called the "Company"),
W I T N E S S E T H :
WHEREAS, the Authority is authorized and empowered under Title 35,
Chapter 5, Arizona Revised Statutes, as amended (the "Act"), to issue its
bonds in accordance with the Act and to make secured or unsecured loans for
the purpose of financing or refinancing the acquisition, construction,
improvement or equipping of projects consisting of land, any building or
other improvement, and all real and personal properties, including but not
limited to machinery and equipment, whether or not now in existence or under
construction, whether located within or without Apache County, which shall
be suitable for, among other things, facilities for the furnishing of
electric energy, gas or water, air and water pollution control facilities
and sewage and solid waste disposal facilities, and to charge and collect
interest on such loans and pledge the proceeds of loan agreements as
security for the payment of the principal of and interest on any bonds, or
designated issues of bonds, issued by the Authority and any agreements made
in connection therewith, whenever the Board of Directors of the Authority
finds such loans to be in furtherance of the purposes of the Authority or in
the public interest;
WHEREAS, the Authority has heretofore issued and sold $100,000,000
aggregate principal amount of its Pollution Control Revenue Bonds, 1981
Series B (Tucson Electric Power Company Project), all of which remain
outstanding (the "1981 Bonds"), the proceeds of which were loaned to the
Company to finance a portion of the costs of the acquisition, construction,
improvement and equipping of the air and water pollution control facilities,
sewage and solid waste disposal facilities and the facilities for furnishing
electric energy (the "Facilities");
WHEREAS, the Authority proposes to issue and sell its Industrial
Development Revenue Bonds, 1998 Series C (Tucson Electric Power Company
Project) (the "Bonds") for the purpose of refinancing, by the payment or
redemption of $16,500,000 principal amount of the 1981 Bonds, or provision
therefor, which represents the extent to which the 1981 Bonds financed the
portion of the costs of the Facilities, as described in Exhibit A hereto;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby
and in consideration of the premises, DO HEREBY AGREE as follows:
ARTICLE I
DEFINITIONS
SECTION I.01. Definitions. The terms defined in this Article I shall
for all purposes of this Agreement have the meanings herein specified,
unless the context clearly requires otherwise:
Act:
"Act" shall mean Title 35, Chapter 5, Arizona Revised Statutes, and all
acts supplemental thereto or amendatory thereof.
Administration Expenses:
"Administration Expenses" shall mean the reasonable expenses incurred by
the Authority with respect to this Agreement, the Indenture and any
transaction or event contemplated by this Agreement or the Indenture,
including the compensation and reimbursement of expenses and advances
payable to the Trustee, to the paying agent, any co-paying agent and the
registrar under the Indenture.
Agreement:
"Agreement" shall mean this Loan Agreement, dated as of March 1, 1998,
between the Authority and the Company, and any and all modifications,
alterations, amendments and supplements hereto.
Authority:
"Authority" shall mean The Industrial Development Authority of the County
of Apache, an Arizona nonprofit corporation designated by law as a political
subdivision of the State of Arizona incorporated for and with the approval
of Apache County, Arizona, pursuant to the provisions of the Constitution of
the State of Arizona and the Act, its successors and their assigns.
Authorized Company Representative:
"Authorized Company Representative" shall mean each person at the time
designated to act on behalf of the Company by written certificate furnished
to the Authority and the Trustee containing the specimen signature of such
person and signed on behalf of the Company by its President, any Vice
President or its Treasurer, together with its Secretary or any Assistant
Secretary.
Bond Counsel:
"Bond Counsel" shall mean any firm or firms of nationally recognized bond
counsel experienced in matters pertaining to the validity of, and exclusion
from gross income for federal tax purposes of interest on bonds issued by
states and political subdivisions, selected by the Company and acceptable to
the Authority.
Bond Fund:
"Bond Fund" shall mean the fund created by Section 4.01 of the Indenture.
Bonds:
"Bond" or "Bonds" shall mean the Industrial Development Revenue Bonds,
1998 Series C (Tucson Electric Power Company Project) of the Authority.
Code:
"Code" shall mean the Internal Revenue Code of 1986 or any successor
statute thereto. Each reference to a section of the Code herein shall be
deemed to include the United States Treasury Regulations proposed or in
effect thereunder and applicable to the Bonds or the use of the proceeds
thereof, unless the context clearly requires otherwise. Reference to any
particular Code section shall, in the event of a successor Code, be deemed
to be a reference to the successor to such Code section.
Company:
"Company" shall mean Tucson Electric Power Company, a corporation
organized and existing under the laws of the State of Arizona, its
successors and their assigns, including, without limitation, any successor
obligor under Section 6.01 or 7.01 to the extent of the obligations assumed
thereunder.
Completion Date:
"Completion Date" shall be the date on which the Facilities are completed
in their entirety and ready to be placed in service and operated, all as
determined by the Company.
Facilities:
"Facilities" shall mean the facilities for electric transmission and/or
distribution currently existing, under construction and to be constructed
which are described in Exhibit A hereto, as revised from time to time to
reflect any changes therein, additions thereto, substitutions therefor and
deletions therefrom permitted by the terms hereof, subject, however, to the
provisions of Section 7.01 hereof.
Indenture:
"Indenture" shall mean the Indenture of Trust, dated as of March 1, 1998,
between the Authority and the Trustee relating to the Bonds, and any and all
modifications, alterations, amendments and supplements thereto.
Loan Payments:
"Loan Payments" shall mean the payments required to be made by the Company
pursuant to Section 5.01 hereof.
1954 Code:
"1954 Code" shall mean the Internal Revenue Code of 1954, as amended.
1981 Bonds:
"1981 Bonds" shall mean the $100,000,000 aggregate principal amount of the
Authority's Pollution Control Revenue Bonds, 1981 Series B (Tucson Electric
Power Company Project).
Outstanding:
"Outstanding", when used in reference to the Bonds, shall mean, as at any
particular date, the aggregate of all Bonds authenticated and delivered
under the Indenture except:
(a) those canceled by the Trustee at or prior to such date or
delivered to or acquired by the Trustee at or prior to such date for
cancellation;
(b) those deemed to be paid in accordance with Article VIII of the
Indenture; and
(c) those in lieu of or in exchange or substitution for which other
Bonds shall have been authenticated and delivered pursuant to the
Indenture, unless proof satisfactory to the Trustee and the Company is
presented that such Bonds are held by a bona fide holder in due course.
Person:
"Person" means (i) any corporation, limited liability company,
partnership, joint venture, association, joint-stock company, business
trust, or unincorporated organization, in each case formed or organized
under the laws of the United States of America, any state thereof or the
District of Columbia, or (ii) the United States of America or any state
thereof, or any political subdivision of either thereof, or any agency,
authority or other instrumentality of any of the foregoing.
Tax Agreement:
"Tax Agreement" shall mean that tax certificate and agreement, dated the
date of the initial authentication and delivery of the Bonds, between the
Authority and the Company, relating to the requirements of the Code and the
1954 Code, and any and all modifications, alterations, amendments and
supplements thereto.
Trustee:
"Trustee" shall mean First Trust of New York, National Association, as
trustee under the Indenture, its successors in trust and their assigns.
SECTION I.02. Incorporation of Certain Definitions by
Reference. Each capitalized term used herein and not otherwise defined
herein shall have the meaning set forth in the Indenture.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION II.01. Representations and Warranties of the
Authority. The Authority makes the following representations and
warranties as the basis for the undertakings on the part of the Company
contained herein:
(a) The Authority is an Arizona nonprofit corporation designated by law
as a political subdivision of the State of Arizona;
(b) The Authority has the power to enter into this Agreement and the
Indenture and to perform and observe the agreements and covenants on its
part contained herein and therein, including without limitation the power
to issue and sell the Bonds as contemplated herein and in the Indenture,
and by proper action has duly authorized the execution and delivery hereof
and thereof;
(c) The execution and delivery of this Agreement and the Indenture by
the Authority do not, and consummation of the transactions contemplated
hereby and fulfillment of the terms hereof and thereof by the Authority
will not, result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Authority is now a party or by
which it is now bound, or, to the best knowledge of the Authority, any
order, rule or regulation applicable to the Authority of any court or of
any regulatory body or administrative agency or other governmental body
having jurisdiction over the Authority or over any of its properties, or
the Constitution or laws of the State of Arizona; and
(d) No consent, approval, authorization or other order of any regulatory
body or administrative agency or other governmental body is legally
required for the Authority's participation in the transactions
contemplated by this Agreement, except such as may have been obtained or
as may be required under the securities laws of any jurisdiction.
SECTION II.02. Representations and Warranties of the Company.
The Company makes the following representations and warranties as the basis
for the undertakings on the part of the Authority contained herein:
(a) The Company is a corporation duly organized and existing in good
standing under the laws of the State of Arizona and duly qualified as a
foreign corporation in the State of New Mexico;
(b) The Company has power to enter into this Agreement and to perform
and observe the agreements and covenants on its part contained herein and
by proper corporate action has duly authorized the execution and delivery
hereof and all other documents hereby executed by the Company;
(c) The execution and delivery of this Agreement by the Company do not,
and consummation of transactions contemplated hereby and fulfillment of
the terms hereof by the Company will not, result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is now bound, or the Restated Articles
of Incorporation or by-laws of the Company, or any order, rule or
regulation applicable to the Company of any court or of any regulatory
body or administrative agency or other governmental body having
jurisdiction over the Company or over any of its properties, or any
statute of any jurisdiction applicable to the Company;
(d) The Arizona Corporation Commission has approved all matters relating
to the Company's participation in the transactions contemplated by this
Agreement which require said approval, and no other consent, approval,
authorization or other order of any regulatory body or administrative
agency or other governmental body is legally required for the Company's
participation therein, except such as may have been obtained or as may be
required under the securities laws of any jurisdiction;
(e) The Facilities are to be used solely for purposes contemplated by
the Act and are located or are to be located within the State of Arizona;
and
(f) All of the proceeds of the Bonds (exclusive of accrued interest, if
any, paid by the initial purchasers of such Bonds upon delivery thereof)
will be expended to refinance a portion of the Facilities through the
payment or redemption of $16,500,000 aggregate principal amount of the
1981 Bonds, or provisions therefor.
ARTICLE III
THE FACILITIES
SECTION III.01. Facilities; Property of the Company. An undivided
interest in the Facilities shall be the property of the Company and the
Authority shall have no right, title or interest in the Facilities.
SECTION III.02. Revision of Plans and Specifications. The Company may
consent to one or more revisions to the plans and specifications for the
Facilities (including without limitation any changes therein, additions
thereto, substitutions therefor and deletions therefrom), at any time and
from time to time prior to the Completion Date in any respect; provided,
however, that, if any such revision shall render inaccurate the description
of the Facilities contained in Exhibit A hereto, the Company shall deliver
to the Authority and the Trustee (a) a revised Exhibit A containing a
description of the Facilities as revised, the accuracy of which shall have
been certified by an Authorized Company Representative, and (b) an opinion
of Bond Counsel to the effect that the Facilities as described in the
revised Exhibit A are such that the expenditure of the proceeds of the Bonds
pursuant to this Agreement will not, in and of itself, impair the validity
of the Bonds under the Act or the exclusion from gross income for federal
tax purposes of interest on the Bonds. A revision of Exhibit A hereto
pursuant to this Section 3.02 shall not constitute an amendment, change or
modification of this Agreement within the meaning of Article XII of the
Indenture.
SECTION III.03. Maintenance of Facilities; Remodeling. The Company
shall at all times cause the Facilities, and every element and unit thereof,
to be maintained, preserved and kept in thorough repair, working order and
condition and cause all needful and proper repairs and renewals thereto to
be made; provided, however, that the Company may cause the operation of the
Facilities, or any element or unit thereof, to be discontinued if, in the
judgment of the Company, it is no longer advisable to operate the same, or
if the Company intends to sell or dispose of the same and within a
reasonable time shall endeavor to effectuate such sale or disposition.
After the Completion Date, the Company may, subject to the provisions of
Section 6.05 hereof, at its own expense remodel the Facilities or make such
substitutions, modifications and improvements to the Facilities from time to
time as it, in its discretion, may deem to be desirable for its uses and
purposes, which remodeling, substitutions, modifications and improvements
shall be included under the terms of this Agreement as part of the
Facilities.
SECTION III.04. Insurance.
The Company shall keep the Facilities insured against fire and
other risks to the extent usually insured against by companies owning and
operating similar property, by reputable insurance companies or, at the
Company's election, with respect to all or any element or unit of the
Facilities, by means of an adequate insurance fund set aside and maintained
by it out of its own earnings or in conjunction with other companies through
an insurance fund, trust or other agreement or, by means of unfunded
self-insurance as may be reasonable and customary by companies owning and
operating similar property. All proceeds of such insurance shall be for the
account of the Company.
SECTION III.05. Condemnation. The Company shall be entitled to the
entire proceeds of any condemnation award or portion thereof made for damages
to or takings of the Facilities or other property of the Company.
ARTICLE IV
ISSUANCE OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS
OF THE BONDS
SECTION IV.01. Issuance of the Bonds. The Authority shall issue the
Bonds under and in accordance with the Indenture, subject to the provisions
of the bond purchase agreement among the Authority, the initial purchaser or
purchasers of the Bonds and the Company. The Company hereby approves the
issuance of the Bonds and all terms and conditions thereof.
SECTION IV.02. Issuance of Other Obligations. The Authority and the
Company expressly reserve the right to enter into, to the extent permitted
by law, but shall not be obligated to enter into, an agreement or agreements
other than this Agreement with respect to the issuance by the Authority,
under an indenture or indentures other than the Indenture, of obligations to
provide additional funds to pay the cost of construction of the Facilities
or obligations to refund all or any principal amount of the Bonds, or any
combination thereof.
SECTION IV.03. The Loan; Disposition of Bond Proceeds. The Authority
and the Company shall enter into escrow arrangements with the trustee for
the 1981 Bonds and shall cause the proceeds of the Bonds, other than accrued
interest, if any, paid by the initial purchaser or purchasers thereof, to be
deposited in escrow with such trustee to be applied to the payment of the
1981 Bonds upon the redemption thereof.
The Authority shall establish the Bond Fund with the Trustee in
accordance with Section 4.01 of the Indenture.
SECTION IV.04. Investment of Moneys in Funds and Accounts. The
Company and the Authority agree that any moneys held in any fund or account
created by the Indenture shall be invested as provided in the Indenture.
ARTICLE V
LOAN PAYMENTS; OTHER OBLIGATIONS
SECTION V.01. Loan Payments.
In consideration of the issuance of the Bonds and the disposition
of the proceeds thereof as contemplated in Section 4.03 hereof,
the Company shall pay, or cause to be paid, to the Trustee for the account
of the Authority an amount equal to the aggregate principal amount of the
Bonds from time to time Outstanding and, as interest on its obligation to
pay such amount, an amount equal to premium, if any, and interest on such
Bonds, such amounts to be paid in installments due on the dates, in the
amounts and in the manner provided in the Indenture for the Authority to
cause amounts to be deposited in the Bond Fund for the payment of the
principal of and premium, if any, and interest on the Bonds whether at
stated maturity, upon redemption or acceleration or otherwise; provided,
however, that the obligation of the Company to make any such payment
hereunder shall be reduced by the amount of any reduction under the
Indenture of the amount of the corresponding payment required to be made by
the Authority thereunder.
SECTION V.02. Payments Assigned; Obligation Absolute. It is
understood and agreed that all Loan Payments are, by the Indenture, to be
pledged by the Authority to the Trustee, and that all rights and interest of
the Authority hereunder (except for the Authority's rights under Sections
5.03, 5.04, 6.03 and 8.05 hereof and any rights of the Authority to receive
notices, certificates, requests, requisitions and other communications
hereunder) are to be pledged and assigned to the Trustee. The Company
assents to such pledge and assignment and agrees that the obligation of the
Company to make the Loan Payments shall be absolute, irrevocable and
unconditional and shall not be subject to cancellation, termination or
abatement, or to any defense other than payment or to any right of set-off,
counterclaim or recoupment arising out of any breach by the Authority or the
Trustee or any other party under this Agreement, the Indenture or otherwise,
or out of any obligation or liability at any time owing to the Company by
the Authority, the Trustee or any other party, and, further, that the Loan
Payments and the other payments due hereunder shall continue to be payable
at the times and in the amounts herein and therein specified, whether or not
the Facilities, or any portion thereof, shall have been completed or shall
have been destroyed by fire or other casualty, or title thereto, or the use
thereof, shall have been taken by the exercise of the power of eminent
domain, and that there shall be no abatement of or diminution in any such
payments by reason thereof, whether or not the Facilities shall be used or
useful, whether or not any applicable laws, regulations or standards shall
prevent or prohibit the use of the Facilities, or for any other reason, all
of the foregoing being subject, however, to the provisions of Sections 6.01
and 7.01 hereof.
SECTION V.03. Payment of Expenses.
The Company shall pay all Administration Expenses, including,
without limitation, Administration Expenses incurred at and
subsequent to the time the Bonds are deemed to have been paid in accordance
with Article VIII of the Indenture. The payment of the compensation and the
reimbursement of expenses and advances of the Trustee, of the paying agent,
any co-paying agent and the registrar under the Indenture shall be made
directly to such entities.
SECTION V.04. Indemnification. The Company releases the Authority,
the Trustee and their directors, officers, employees and agents from, agrees
that the Authority and the Trustee shall not be liable for, and agrees to
indemnify and hold the Authority, the Trustee and their directors, officers,
employees and agents free and harmless from, any liability (including,
without limitation, attorneys' and other agents' fees and expenses) for any
loss or damage to property or any injury to or death of any person that may
be occasioned by any cause whatsoever pertaining to the Facilities, except
(i) in the case of the Trustee, as a result of the negligence or bad faith
or willful misconduct of the Trustee or its directors, officers, employees
and agents; and (ii) in the case of the Authority, as a result of gross
negligence or bad faith of the Authority or its directors, officers,
employees and agents.
The Company shall indemnify and hold the Authority and the Trustee,
free and harmless from any loss, claim, damage, tax, penalty, liability,
disbursement, litigation expenses, attorneys' and other agents' fees and
expenses or court costs arising out of, or in any way relating to, the
execution or performance of this Agreement, the issuance or sale of the
Bonds, actions taken under the Indenture or any other cause whatsoever
pertaining to the Facilities, except (i) in the case the Trustee, as a
result of the negligence or bad faith or willful misconduct of the Trustee;
and (ii) in the case of the Authority, as a result of the gross negligence
or bad faith of the Authority.
The Company shall indemnify and hold the Authority and its directors,
officers, employees and agents free and harmless from any loss, claim,
damage, tax, penalty, liability, disbursement, litigation expenses,
attorney's fees and expenses or court costs arising out of or in any way
relating to any untrue statement or alleged untrue statement of any material
fact or omission or alleged omission to state a material fact necessary to
make the statements made, in light of the circumstances under which they
were made, not misleading in any official statement or other offering
material utilized in connection with the sale of any Bonds.
SECTION V.05. Payment of Taxes; Discharge of Liens. The Company
shall: (a) pay, or make provision for payment of, all lawful taxes and
assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, levied or assessed by any federal,
state or municipal government or political body upon the Facilities or any
part thereof or upon the Authority with respect to the Loan Payments, when
the same shall become due; and (b) pay or cause to be satisfied and
discharged or make adequate provision to satisfy and discharge, within sixty
(60) days after the same shall accrue, any lien or charge upon the Loan
Payments, and all lawful claims or demands for labor, materials, supplies or
other charges which, if unpaid, might be or become a lien upon such amounts;
provided, that, if the Company shall first notify the Authority and the
Trustee of its intention so to do, the Company may in good faith contest any
such lien or charge or claims or demands in appropriate legal proceedings,
and in such event may permit the items so contested and identified as such
by the Company to remain undischarged and unsatisfied during the period of
such contest and any appeal therefrom, unless the Trustee shall notify the
Company in writing that, in the opinion of counsel to the Trustee, based
upon material facts disclosed to the Trustee without any duty of
investigation, by nonpayment of any such items the lien of the Indenture as
to the Loan Payments will be materially endangered, in which event the
Company shall promptly pay and cause to be satisfied and discharged all such
unpaid items. The Authority shall cooperate fully with the Company in any
such contest.
ARTICLE VI
SPECIAL COVENANTS
SECTION VI.01. Maintenance of Corporate Existence. Except as
permitted in this Section 6.01, the Company shall maintain its corporate
existence, shall not sell, transfer or otherwise dispose of all of its
assets, as or substantially as an entirety, and shall not consolidate with
or merge with or into another Person. The Company may consolidate with or
merge into another Person organized under the laws of the United States of
America, any state thereof or the District of Columbia, or sell, transfer or
otherwise dispose of all of its assets, as or substantially as an entirety,
to any Person, if the surviving or resulting Person (if other than the
Company) or the transferee Person, as the case may be, prior to or
simultaneously with such merger, consolidation, sale, transfer or
disposition, assumes, by delivery to the Trustee and the Authority of an
instrument in writing satisfactory in form to the Authority and the Trustee,
all the obligations of the Company under this Agreement, including, without
limitation, the obligations of the Company under Section 5.01 hereof. Upon
such an assumption following any such sale, transfer or other disposition of
assets, the Company shall be released and discharged from all liability in
respect of all obligations under this Agreement. Notwithstanding the
foregoing, in the case of any such sale, transfer or other disposition of
assets, which do not include the Facilities, the Company shall remain liable
in respect of all obligations under this Agreement other than the
obligations under Section 5.01 hereof, and the transferee shall not be
required to assume any obligations hereunder other than the obligations
under Section 5.01 hereof; provided, however, that the transferee shall be
required to assume all such other obligations unless the Company shall have
delivered to the Authority and the Trustee an opinion of Bond Counsel to the
effect that the non-assumption by the transferee of such other obligations
will not impair the validity under the Act of the Bonds and will not
adversely affect the exclusion from gross income for federal tax purposes of
interest on the Bonds.
If consolidation, merger or sale, transfer or other disposition is made
as permitted by this Section 6.01, the provisions of this Section 6.01 shall
continue in full force and effect and no further consolidation, merger or
sale or other transfer shall be made except in compliance with the
provisions of this Section 6.01.
Anything in this Agreement to the contrary notwithstanding, the sale,
transfer or other disposition by the Company of all of its facilities (a)
for the generation of electric energy, (b) for the transmission of electric
energy or (c) for the distribution of electric energy, in each case
considered alone, or all of its facilities described in clauses (a) and (b),
considered together, or all of its facilities described in clauses (b) and
(c), considered together, shall in no event be deemed to constitute a sale,
transfer or other disposition of all the properties of the Company, as or
substantially as an entirety, unless, immediately following such sale,
transfer or other disposition, the Company shall own no properties in the
other such categories of property not so sold, transferred or otherwise
disposed of. The character of particular facilities shall be determined by
reference to the Uniform System of Accounts prescribed for public utilities
and licensees subject to the Federal Power Act, as amended, to the extent
applicable.
SECTION VI.02. Permits or Licenses. In the event that it may be
necessary for the proper performance of this Agreement on the part of the
Company or the Authority that any application or applications for any permit
or license to do or to perform certain things be made to any governmental or
other agency by the Company or the Authority, the Company and the Authority
each shall, upon the request of either, execute such application or
applications.
SECTION VI.03. Authority's Access to Facilities. The Authority shall
have the right, upon appropriate prior notice to the Company, to have
reasonable access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same.
SECTION VI.04. Tax-Exempt Status of Interest on Bonds. (a) It is the
intention of the parties hereto that interest on the Bonds shall be and
remain tax-exempt, and to that end the covenants and agreements of the
Authority and the Company in this Section 6.04 and the Tax Agreement are for
the benefit of the Owners from time to time of the Bonds.
(b) Each of the Company and the Authority covenants and agrees for the
benefit of the Owners from time to time of the Bonds that it will not
directly or indirectly use or permit the use of (to the extent within its
control) the proceeds of any of the Bonds or any other funds, or take or
omit to take any action, if and to the extent such use, or the taking or
omission to take such action, would cause any of the Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code or otherwise subject to
federal income taxation by reason of Section 103 and 141 through 150 of the
Code or Section 103 of the 1954 Code and Title XIII of the Tax Reform Act of
1986, as applicable, and any applicable regulations promulgated thereunder.
To such ends, the Authority and the Company will comply with all
requirements of such Section 148 to the extent applicable to the Bonds. In
the event that at any time the Authority or the Company is of the opinion
that for purposes of this Section 6.04(b) it is necessary to restrict or
limit the yield on the investment of any moneys held by the Trustee under
the Indenture, the Authority or the Company shall so notify the Trustee in
writing.
Without limiting the generality of the foregoing, the Company and the
Authority agree that there shall be paid from time to time all amounts
required to be rebated to the United States of America pursuant to Section
148(f) of the Code and any applicable Treasury Regulations. This covenant
shall survive payment in full or defeasance of the Bonds and the
satisfaction and discharge of the Indenture. The Company specifically
covenants to pay or cause to be paid the Rebate Requirement as defined and
described in the Tax Agreement.
(c) The Authority certifies and represents that it has not taken, and
the Authority covenants and agrees that it will not take, any action which
results in interest paid on the Bonds being included in gross income of the
Owners of the Bonds for federal tax purposes pursuant to Sections 103 and
141 of the Code or to Section 103 of the 1954 Code and Title XIII of the Tax
Reform Act of 1986, as applicable, and any regulations thereunder; and the
Company certifies and represents that it has not taken or (to the extent
within its control) permitted to be taken, and the Company covenants and
agrees that it will not take or (to the extent within its control) permit to
be taken any action which will cause the interest on the Bonds to become
includable in gross income for federal income tax purposes; provided,
however, that neither the Company nor the Authority shall be deemed to have
violated these covenants if the interest on any of the Bonds becomes taxable
to a person solely because such person is a "substantial user" of the
Facilities or a "related person" within the meaning of Section 103(b)(13) of
the 1954 Code and provided, further, that none of the covenants and
agreements herein contained shall require either the Company or the
Authority to enter an appearance or intervene in any administrative,
legislative or judicial proceeding in connection with any changes in
applicable laws, rules or regulations or in connection with any decisions of
any court or administrative agency or other governmental body affecting the
taxation of interest on the Bonds. The Company acknowledges having read
Section 7.08 of the Indenture and agrees to perform all duties imposed on it
by such Section 7.08, by this Section and by the Tax Agreement. Insofar as
Section 7.08 of the Indenture and the Tax Agreement impose duties and
responsibilities on the Company, they are specifically incorporated herein
by reference.
(d) Notwithstanding any provision of this Section 6.04 and Section 7.08
of the Indenture, if the Company shall provide to the Authority and the
Trustee an opinion of Bond Counsel to the effect that any specified action
required under this Section 6.04 and Section 7.08 of the Indenture is no
longer required or that some further or different action is required to
maintain the tax-exempt status of interest on the Bonds, the Company, the
Trustee and the Authority may conclusively rely upon such opinion in
complying with the requirements of this Section 6.04, and the covenants
hereunder shall be deemed to be modified to that extent.
SECTION VI.05. Use of Facilities. So long as any Bonds are Outstanding
and the Facilities are operated by or for the benefit of the Company, the
Company shall cause the Facilities to be used for purposes contemplated by
the Act and in the Tax Agreement.
SECTION VI.06. Financing Statements. The Company shall file and record,
or cause to be filed and recorded, all financing statements and continuation
statements referred to in Section 7.07 of the Indenture.
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
SECTION VII.01. Conditions.
The Company's interest in this Agreement may be assigned as a
whole or in part, and its interest in the Facilities may be assigned,
leased, subleased, sold, transferred or otherwise disposed of by the Company
as a whole or in part (whether an interest in a specific element or unit or
an undivided interest), to any Person; provided, however, that no such
assignment, lease, sublease, sale, transfer or other disposition (a) shall
relieve the Company from its primary liability for its obligations under
Section 5.01 hereof or (b) shall be made unless the assignee, lessee,
sublessee, purchaser or other transferee, as the case may be, prior to or
simultaneously with such assignment, lease, sublease, sale, transfer or
other disposition, assumes, by delivery of an instrument in writing
satisfactory in form to the Trustee and the Authority, all other obligations
of the Company hereunder to the extent of the interest assigned, leased,
subleased, sold, transferred or otherwise disposed of, and the Company shall
be released of and discharged from such obligations to the extent so
assumed. Notwithstanding the foregoing, (a) if (i) the Company's interest
in this Agreement shall be assigned as a whole or in undivided part, (ii)
the Company's interest in the Facilities shall be leased or subleased as a
whole or in undivided part and the term of such leasehold or the term of any
extension or extensions thereof at the option of the Company shall extend
beyond the maturity date of the Bonds or (iii) the Company's interest in the
Facilities shall be assigned, sold, transferred or otherwise disposed of as
a whole or in undivided part, and (b) in the event that the assignee,
lessee, sublessee, purchaser or other transferee shall assume the
obligations of the Company under Section 5.01 hereof for the remaining term
of this Agreement, to the extent of such assignment, lease, sublease, sale,
transfer or other disposition, the Company shall be released from and
discharged of all liability in respect of such obligations to the extent so
assumed (but only to such extent); provided, however, that the release and
discharge of the Company pursuant to clause (b) shall be conditioned upon
the delivery by the Company to the Authority and the Trustee of a
certificate of an Independent Expert (as hereinafter defined) describing the
interests so assigned, leased, subleased, sold, assigned, transferred or
otherwise disposed of, together with all other rights, interests, assets
and/or properties assigned, leased, subleased, sold, transferred or
otherwise disposed of by the Company to the same Person in the same or a
related transaction, stating that such rights, interests, assets and/or
properties so described constitute facilities for the generation,
transmission and/or distribution of electric energy and stating that, in
the opinion of such Independent Expert, the Fair Value (as hereinafter
defined) of such rights, interests, assets and/or properties to the Person
acquiring the same is not less than an amount equal to 10/7 of the sum of
(x) the aggregate principal amount of the Bonds then Outstanding and (y) the
outstanding principal amount of all other obligations of the Company
representing indebtedness for borrowed money or for the deferred purchase
price of property which are being assumed by such Person; provided, further,
that after any such assumption, release and discharge as aforesaid, the
Company may again assume such obligations under Section 5.01 hereof, in
whole or in part, at any time and from time to time, and, to the extent of
any such assumption by the Company (but only to such extent), the aforesaid
assignee, lessee, sublessee, purchaser or other transferee shall be released
from and discharged of all liability in respect of such obligations.
Anything herein to the contrary notwithstanding, the Company shall not
make any assignment, lease, sublease, sale, transfer or other disposition as
provided in the immediately preceding paragraph unless it shall have
furnished to the Authority and the Trustee an opinion of Bond Counsel to the
effect that the proposed transaction will not impair the validity under the
Act of the Bonds and will not adversely affect the exclusion of interest on
the Bonds from gross income for federal tax purposes.
After any assignment, lease, sublease, sale, transfer or other
disposition of any element or unit of the Facilities, or any interest
therein, the Company may, at its option, cause such element or unit, or
interest therein, to no longer be deemed to be part of the Facilities for
the purposes of this Agreement by delivering to the Authority and the
Trustee the agreements or other documents required pursuant to Section 7.02
hereof together with an instrument signed by an Authorized Company
Representative stating that such element or unit, or interest therein, shall
no longer be deemed to be part of the Facilities for the purposes of this
Agreement.
For purposes of this Section 7.01:
(a) "Independent Expert" means a Person which (i) is an engineer,
appraiser or other expert and which, with respect to any certificate to be
delivered pursuant to this Section, is qualified to pass upon the matter
set forth in such certificate and (ii)(A) is in fact independent, (B) does
not have any direct material financial interest in the transferee or in
any obligor upon the Bonds or under this Agreement or in any affiliate of
the transferee or any such obligor, (C) is not connected with the
transferee or any such obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or any person performing similar
functions and (D) is approved by the Trustee in the exercise of reasonable
care; for purposes of this definition "engineer" means a Person engaged in
the engineering profession or otherwise qualified to pass upon engineering
matters (including, but not limited to, a Person licensed as a
professional engineer, whether or not then engaged in the engineering
profession); and for purposes of this definition "appraiser" means a
Person engaged in the business of appraising property or otherwise
qualified to pass upon the Fair Value or fair market value of property.
(b) "Fair Value" means the fair value of the interests, rights, assets
and/or properties assigned, leased, subleased, sold, transferred or
otherwise disposed of (but, in the case of a lease or sublease, only to
the extent of such lease) as may be determined by reference to (i) except
in the case of a lease or sublease, the amount which would be likely to be
obtained in an arm's-length transaction with respect to such interests,
rights, assets and/or properties between an informed and willing buyer and
an informed and willing seller, under no compulsion, respectively, to buy
or sell, (ii) in the case of a lease or sublease, the amount (discounted
to present value at a rate not lower than the taxable equivalent of the
yield to maturity of the Bonds based on prevailing market prices
immediately prior to the first public announcement of the proposed
transaction) which would be likely to be obtained in an arm's-length
transaction with respect to such interests, rights, assets and/or
properties between an informed and willing lessee and an informed and
willing lessor, neither under any compulsion to lease, (iii) the amount of
investment with respect to such interests, rights, assets and/or
properties which, together with a reasonable return thereon, would be
likely to be recovered through ordinary business operations or otherwise,
(iv) the cost, accumulated depreciation and replacement cost with respect
to such interests, rights, assets and/or properties and/or (v) any other
relevant factors; provided, however, that (x) Fair Value shall be
determined without deduction for any mortgage, deed of trust, pledge,
security interest, encumbrance, lease, reservation, restriction,
servitude, charge or similar right or any other lien of any kind and (y)
the Fair Value to the transferee of any property shall not reflect any
reduction relating to the fact that such property may be of less value to
a Person which is not the owner, lessee, sublease or operator of the
property or any portion thereof than to a Person which is such owner,
lessee or operator. Fair Value may be determined, without physical
inspection, by the use of accounting and engineering records and other
data maintained by the Company or the transferee or otherwise available to
the Independent Expert certifying the same.
SECTION VII.02. Instrument Furnished to the Authority and
Trustee. The Company shall, within fifteen (15) days after the
delivery thereof, furnish to the Authority and the Trustee a true and
complete copy of the agreements or other documents effectuating any such
assignment, lease, sublease, sale, transfer or other disposition.
SECTION VII.03. Limitation.
This Agreement shall not be assigned nor shall the Facilities
be assigned, leased, subleased, sold, transferred or otherwise disposed of,
in whole or in part, except as provided in this Article VII or in Section
6.01 or 5.02 hereof. This Article VII shall not apply to any sale, transfer
or other disposition by the Company of all of its assets, as or
substantially as an entirety, as contemplated in Section 6.01.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION VIII.01. Events of Default. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) a failure by the Company to make any Loan Payment, which failure
shall have resulted in an "Event of Default" under clause (a) or (b) of
Section 9.01 of the Indenture;
(b) a failure by the Company to pay when due any amount required to be
paid under this Agreement or to observe and perform any covenant,
condition or agreement on its part to be observed or performed (other than
a failure described in clause (a) above), which failure shall continue for
a period of sixty (60) days after written notice, specifying such failure
and requesting that it be remedied, shall have been given to the Company
by the Authority or the Trustee, unless the Authority and the Trustee
shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Authority and the Trustee shall be
deemed to have agreed to an extension of such period if corrective action
is initiated by the Company within such period and is being diligently
pursued; or
(c) the dissolution or liquidation of the Company, or failure by the
Company promptly to lift any execution, garnishment or attachment of such
consequence as will impair its ability to make any payments under this
Agreement, or the entry of an order for relief by a court of competent
jurisdiction in any proceeding for its liquidation or reorganization under
the provisions of any bankruptcy act or under any similar act which may be
hereafter enacted, or an assignment by the Company for the benefit of its
creditors, or the entry by the Company into an agreement of composition
with its creditors (the term "dissolution or liquidation of the Company,"
as used in this clause, shall not be construed to include the cessation of
the corporate existence of the Company resulting either from a merger or
consolidation of the Company into or with another Person or a dissolution
or liquidation of the Company following a transfer of all or substantially
all its assets as an entirety, under the conditions permitting such
actions contained in Section 6.01 hereof).
SECTION VIII.02. Force Majeure. The provisions of Section 8.01 hereof
are subject to the following limitations: if by reason of acts of God;
strikes, lockouts or other industrial disturbances; acts of public enemies;
orders of any kind of the government of the United States or of the State of
Arizona, or any department, agency, political subdivision, court or official
of any of them, or any civil or military authority; insurrections; riots;
epidemics; landslides; lightning; earthquakes; volcanoes; fires; hurricanes;
tornadoes; storms; floods; washouts; droughts; arrests; restraint of
government and people; civil disturbances; explosions; breakage or accident
to machinery; partial or entire failure of utilities; or any cause or event
not reasonably within the control of the Company, the Company is unable in
whole or in part to carry out any one or more of its agreements or obligations
contained herein, other than its obligations under Sections 5.01, 5.03, 5.05,
and 6.01 hereof, the Company shall not be deemed in default by reason of not
carrying out said agreement or agreements or performing said obligation or
obligations during the continuance of such inability. The Company shall
make reasonable effort to remedy with all reasonable dispatch the cause or
causes preventing it from carrying out its agreements; provided, that the
settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company shall not be
required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties
when such course is in the judgment of the Company unfavorable to the
Company.
SECTION VIII.03. Remedies.
(a) Upon the occurrence and continuance of any Event of Default
described in clause (a) of Section 8.01 hereof, and further upon the
condition that, in accordance with the terms of the Indenture, the Bonds
shall have been declared to be immediately due and payable pursuant to any
provision of the Indenture, the Loan Payments shall, without further action,
become and be immediately due and payable.
Any waiver of any "Event of Default" under the Indenture and a rescission
and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Agreement and a
rescission and annulment of the consequences thereof.
(b) Upon the occurrence and continuance of any Event of Default, the
Authority, or the Trustee with respect to the rights of the Authority
assigned to the Trustee by the Indenture, may take any action at law or in
equity to collect any payments then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant
of the Company hereunder.
(c) Any amounts collected by the Trustee from the Company pursuant to
this Section 8.03 shall be applied in accordance with the Indenture.
SECTION VIII.04. No Remedy Exclusive. No remedy conferred upon or
reserved to the Authority hereby is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute. No delay
or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof,
but any such right or power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Authority to exercise
any remedy reserved to it in this Article VIII, it shall not be necessary to
give any notice, other than such notice as may be herein expressly required.
SECTION VIII.05. Reimbursement of Attorneys' and Agents'
Fees. If the Company shall default under any of the provisions hereof and
the Authority or the Trustee shall employ attorneys or agents or incur other
reasonable expenses for the collection of payments due hereunder or for the
enforcement of performance or observance of any obligation or agreement on
the part of the Company contained herein, the Company will on demand
therefor reimburse the Authority or the Trustee and any predecessor Trustee,
as the case may be, for the reasonable fees of such attorneys and such other
reasonable expenses so incurred.
SECTION VIII.06. Waiver of Breach.
In the event any obligation created hereby shall be breached
by either of the parties and such breach shall thereafter be waived
by the other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder. In view
of the assignment of certain of the Authority's rights and interest
hereunder to the Trustee, the Authority shall have no power to waive any
breach hereunder by the Company in respect of such rights and interest
without the consent of the Trustee, and the Trustee may exercise any of such
rights of the Authority hereunder.
ARTICLE IX
REDEMPTION OF BONDS
SECTION IX.01. Redemption of Bonds. The Authority shall take, or cause
to be taken, the actions required by the Indenture to discharge the lien
created thereby through the redemption, or provision for payment or redemption,
of all Bonds then Outstanding, or to effect the redemption, or provision for
payment or redemption, of less than all the Bonds then Outstanding, upon
receipt by the Authority and the Trustee from the Company of a notice
designating the principal amount of the Bonds to be redeemed, or for the
payment or redemption of which provision is to be made, and, in the case of
redemption of Bonds, or provision therefor, specifying the date of redemption
and the applicable redemption provision of the Indenture. Such redemption
date shall not be less than 45 days from the date such notice is given (unless
a shorter notice is satisfactory to the Trustee). Unless otherwise stated
therein, such notice shall be revocable by the Company at any time prior to
the time at which the Bonds to be redeemed, or for the payment or redemption
of which provision is to be made, are first deemed to be paid in accordance
with Article VIII of the Indenture. The Company shall furnish any moneys or
Government Obligations (as defined in the Indenture) required by the
Indenture to be deposited with the Trustee or otherwise paid by the
Authority in connection with any of the foregoing purposes.
SECTION IX.02. Compliance with the Indenture. Anything in this
Agreement to the contrary notwithstanding, the Authority and the Company
shall take all actions required by this Agreement and the Indenture in order
to comply with any provisions of the Indenture requiring the mandatory
redemption of Bonds.
ARTICLE X
MISCELLANEOUS
SECTION X.01. Term of Agreement. This Agreement shall remain in full
force and effect from the date hereof until the right, title and interest
of the Trustee in and to the Trust Estate (as defined in the Indenture)
shall have ceased, terminated and become void in accordance with Article
VIII of the Indenture and until all payments required under this Agreement
shall have been made. Notwithstanding the foregoing, the covenants contained
in Section 5.03, 5.04, Section 6.04 and 8.05 hereof shall survive the
termination of this Agreement.
SECTION X.02. Notices.
Except as otherwise provided in this Agreement, all notices, certificates,
requests, requisitions and other communications hereunder shall be in
writing and shall be sufficiently given and shall be deemed given when
mailed by registered mail, postage prepaid, addressed as follows: if to the
Authority, c/x Xxxxx & Xxx, P.C., 000 Xxxxx Xxxxxx Xxxx Xxxxxx, Xx. Xxxxx,
Xxxxxxx 00000; if to the Company, at 000 Xxxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxx
00000, Attention: Treasurer; and if to the Trustee, at such address as
shall be designated by it in the Indenture. A copy of each notice,
certificate, request or other communication given hereunder to the
Authority, the Company, or the Trustee shall also be given to the others.
The Authority, the Company, and the Trustee may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
SECTION X.03. Parties in Interest.
This Agreement shall inure to the benefit of and shall be
binding upon the Authority, the Company and their respective
successors and assigns, and no other person, firm or corporation shall have
any right, remedy or claim under or by reason of this Agreement; provided,
however, that the rights and remedies granted to the Authority in Article
VIII hereof, shall inure to the benefit of the Trustee, on behalf of the
Owners from time to time of the Bonds, and shall be enforceable by the
Trustee as a third party beneficiary or as assignee of the Authority; and
provided, further, that neither Apache County, Arizona nor the State of
Arizona shall in any event be liable for the payment of the principal of or
premium, if any, or interest on the Bonds or for the performance of any
pledge, mortgage, obligation or agreement created by or arising out of this
Agreement or the issuance of the Bonds, and further that neither the Bonds
nor any such obligation or agreement of the Authority shall be construed to
constitute an indebtedness of Apache County, Arizona or the State of Arizona
within the meaning of any constitutional or statutory provisions whatsoever,
but shall be limited obligations of the Authority payable solely out of the
revenues derived from this Agreement, or from the sale of the Bonds, or from
the investment or reinvestment of any of the foregoing, as provided herein
and in the Indenture.
SECTION X.04. Amendments. This Agreement may be amended only by written
agreement of the parties hereto, subject to the limitations set forth herein
and in the Indenture.
SECTION X.05. Counterparts. This Agreement may be executed in any number
of counterparts, each of which, when so executed and delivered, shall be an
original; but such counterparts shall together constitute but one and the
same Agreement.
SECTION X.06. Severability. If any clause, provision or section of this
Agreement shall, for any reason, be held illegal or invalid by any court, the
illegality or invalidity of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections hereof, and this
Agreement shall be construed and enforced as if such illegal or invalid
clause, provision or section had not been contained herein. In case any
agreement or obligation contained in this Agreement be held to be in
violation of law, then such agreement or obligation shall be deemed to be
the agreement or obligation of the Authority or the Company, as the case may
be, to the full extent permitted by law.
SECTION X.07. Governing Law. The laws of the State of Arizona shall govern
the construction and enforcement of this Agreement, except that the provisions
of Section 13.09 of the Indenture, construed as provided in Section 13.07 of
the Indenture, shall apply to this Agreement as if contained herein.
SECTION X.08. Notice Regarding Cancellation of Contracts. As
required by the provisions of Section 38-511, Arizona Revised Statutes, as
amended, notice is hereby given that political subdivisions of the State of
Arizona or any of their departments or agencies may, within three (3) years
of its execution, cancel any contract, without penalty or further
obligation, made by the political subdivisions or any of their departments
or agencies on or after September 30, 1988, if any person significantly
involved in initiating, negotiating, securing, drafting or creating the
contract on behalf of the political subdivisions or any of their departments
or agencies is, at any time while the contract or any extension of the
contract is in effect, an employee or agent of any other party to the
contract in any capacity or a consultant to any other party of the contract
with respect to the subject matter of the contract. The cancellation shall
be effective when written notice from the chief executive officer or
governing body of the political subdivision is received by all other parties
to the contract unless the notice specifies a later time.
The Company covenants and agrees not to employ as an employee, agent or,
with respect to the subject matter of this Agreement, a consultant, any
person significantly involved in initiating, negotiating, securing, drafting
or creating such Agreement on behalf of the Authority within three (3) years
from the execution hereof, unless a waiver is provided by the Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed as of the day and year first above written.
THE INDUSTRIAL DEVELOPMENT
AUTHORITY
OF THE COUNTY OF APACHE
By:
President
TUCSON ELECTRIC POWER COMPANY
By:
Vice President
EXHIBIT A
(1998 Series C Loan Agreement)
The following facilities located in Pima and Cochise Counties, Arizona
comprise the Facilities being refinanced:
Certain transmission and distribution facilities, and related
properties, and additions and improvements thereto, which are necessary or
appropriate in connection with Tucson Electric Power Company's transmission and
distribution of electric energy produced at the 350 megawatt coal-fixed steam
electric generating unit, known as Springerville Unit No. 2, including all
facilities and costs functionally related and subordinate to such facilities and
to the acquisition, construction or reconstruction thereof, including
engineering and environmental studies, the costs of regulatory proceedings, land
and land rights hereafter acquired for the purpose of constructing such
facilities, necessary excavations, dredging, foundations, structures,
landscaping, walls, monitoring equipment, instrumentation, mechanical and
electrical controls, wiring, cables, towers, valves, piping, meters, other
associated electrical and mechanical equipment and facilities, and all other
improvements and appurtenances necessary or useful for the operation thereof or
required by reason of the installation or operation thereof, including the cost
of any necessary modification to or relocations or replacements of existing
equipment or facilities.
