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TRANSACTION AGREEMENT
dated as of September 9, 1993
among
SOUTHWESTERN PUBLIC SERVICE COMPANY,
as the Supplier,
CAP ROCK ELECTRIC COOPERATIVE, INC.
as the User,
OTP, INC.,
as the Issuer,
METROPOLITAN LIFE INSURANCE COMPANY
METROPOLITAN INSURANCE AND ANNUITY COMPANY
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY
as the Purchaser
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as the Indenture Trustee
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TABLE OF CONTENTS
Page
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TRANSACTION AGREEMENT 1
ARTICLE I -- DEFINITIONS 2
ARTICLE II -- PARTICIPATION IN TRANSACTION 2
Section 2.1. Agreements to Participate 2
Section 2.2. Time and Place of Closing 3
ARTICLE III -- CONDITIONS PRECEDENT 3
Section 3.1. Conditions Precedent to Purchase of
Notes and Receivables 3
Section 3.2. Documents to be Delivered 3
Section 3.3. Opinions 6
Section 3.4. Filings and Recordings 6
Section 3.5. Authorizations; Execution and Delivery
of Documents 6
Section 3.6. Illegality, Etc 7
Section 3.7. Actions, Proceedings 7
Section 3.8. Necessary Actions, Permits, etc. 7
Section 3.9. Representations and Warranties 8
Section 3.10. UCC Searches 8
Section 3.11. Fees 8
Section 3.12. Change in Financial Condition: The
Issuer, the Supplier and the User 8
Section 3.13. Date of Closing 9
Section 3.14. Representations and Warranties 9
Section 3.15. Regulatory Acts 9
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES 9
Section 4.1. Representations and Warranties of the Issuer 9
Section 4.2. Representations and Warranties of the Supplier 13
Section 4.3. Representations and Warranties of the User 18
Section 4.4. Representations and Warranties of the Purchaser 23
Section 4.5. Representations and Warranties of the Indenture Trustee 24
ARTICLE V -- INDEMNITIES 25
Section 5.1. Indemnity of the User 25
Section 5.2. Indemnity of the Supplier 26
Section 5.3. Indemnity of the Issuer 27
Section 5.4. Indemnity in favor of the Indenture Trustee 28
ARTICLE VI -- EXPENSES 29
Section 6.1. Transaction Costs 29
Section 6.2. Fees of the Indenture Trustee 29
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ARTICLE VII -- COVENANTS 29
Section 7.1. Covenants of the User 29
Section 7.2. Covenants of the Supplier 34
Section 7.3. Covenants of the Issuer 39
ARTICLE VIII -- MISCELLANEOUS 46
Section 8.1. Notices 46
Section 8.2. Joint and Several Liability; Parties in Interest 47
Section 8.3. GOVERNING LAW; SUBMISSION TO PROCESS 47
Section 8.4. Amendment 48
Section 8.5. Headings 48
Section 8.6. Counterparts 48
Section 8.7. Severability 48
Section 8.8. Reproduction of Documents 48
Section 8.9. Personal Property 49
Section 8.10. Survival of Agreements 49
Section 8.11. Liabilities of the Purchaser, the
Holders of the Notes and the Holders
of the Receivables 49
Section 8.12. No Partnership 49
Section 8.13. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. 49
Section 8.14. Maximum Interest Payable 50
Section 8.15. Termination of Transaction Agreement
and Transaction Documents 51
Appendix A List of Definitions
Exhibit A Transaction Documents
Exhibit B Note Purchase Agreement
Exhibit C Receivables Purchase Agreement
Exhibit D Trust Indenture
Exhibit E-1 Opinion of Hinkle, Cox, Xxxxx, Xxxxxxxx & Xxxxxxx,
special counsel for the Supplier
Exhibit E-2 Opinion of Xxxxxx & Xxxxxxxxx, P.C., special counsel
for the Issuer and the User
Exhibit E-3 Opinion of Xxxxxxx & Xxxxx, L.L.P., special counsel for the
Indenture Trustee
Exhibit F Construction Contracts
Exhibit G Power Sales Agreement
Exhibit H Transmission Agreement
Exhibit I-1 Certificate Accompanying Financial Statements of the User
Exhibit I-2 Certificate Accompanying Financial Statements of the
Supplier
Exhibit I-3 Certificate Accompanying Financial Statements of the Issuer
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TRANSACTION AGREEMENT
TRANSACTION AGREEMENT (this "Agreement") dated as of September 9,
1993, among SOUTHWESTERN PUBLIC SERVICE COMPANY, a New Mexico corporation, as
the Supplier (capitalized terms used herein being defined as provided in
Article I); CAP ROCK ELECTRIC COOPERATIVE, INC., a Texas corporation, as the
User; OTP, INC., a Texas corporation, as the Issuer; METROPOLITAN LIFE
INSURANCE COMPANY, METROPOLITAN INSURANCE AND ANNUITY COMPANY AND
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, as the Purchaser; and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association, in
its individual capacity only to the extent expressly stated herein and
otherwise not in its individual capacity but solely as the Indenture Trustee
under the Indenture.
WHEREAS, the User desires to purchase electric power and energy from
the Supplier; and
WHEREAS, the Supplier desires to sell electric power and energy to
the User and additional transmission facilities (defined herein as the New
Equipment) must be constructed in order for the Supplier to transmit such
electric power and energy to the User; and
WHEREAS, the Issuer has agreed to construct the New Equipment and to
issue the Notes to the Purchaser and use the proceeds thereof to finance such
construction; and
WHEREAS, upon the completion of each Segment of the New Equipment,
such Segment shall be sold by the Issuer to the Supplier, a license for the
use of the Property Rights shall be granted by the User to the Supplier
pursuant to a License Agreement and a Receivable will be owed by the User to
the Supplier and sold to the Purchaser to refinance the Notes; and
WHEREAS, the User has agreed to owe a Receivable to the Supplier,
which will be sold to the Purchaser to finance the Existing Equipment; and
WHEREAS, the Receivables constitute (i) fair and adequate
consideration to the Supplier for its obligations to the User under the
Transmission Agreement and (ii) fair and adequate consideration to the User
for the benefits to be derived by the User under the Transmission Agreement;
and
WHEREAS, the purchase price for the Receivables is fair and adequate
consideration to the Supplier for its obligations to the Purchaser under the
Receivables Purchase Agreement; and
WHEREAS, the parties hereto wish to set forth their agreement with
respect to the financing of the construction of the New Equipment and the
Existing Equipment and the sale of such electric power and energy; and
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WHEREAS, the parties hereto will each receive an immediate economic
benefit from the consummation of the transactions set forth herein and in the
other Transaction Documents;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context shall otherwise require, the capitalized terms
used herein shall have the respective meanings assigned thereto in Appendix A
attached hereto for all purposes herein (such definitions to be equally
applicable to both the singular and plural forms of the terms defined).
ARTICLE II
PARTICIPATION IN TRANSACTION
Section 2.1. AGREEMENTS TO PARTICIPATE. In reliance on the
agreements, representations and warranties herein contained or made pursuant
hereto, and subject to the terms and conditions hereinafter set forth:
(a) THE PURCHASER. The Purchaser will, subject to the terms
and conditions set forth herein and in the Note Purchase Agreement in
the form of Exhibit B attached hereto, purchase Notes issued by the
Issuer pursuant to the Note Purchase Agreement in an amount not to
exceed $31,000,000. In addition, the Purchaser will, subject to the
terms and conditions set forth herein and in the Receivables Purchase
Agreement in the form of Exhibit C attached hereto, purchase from the
Supplier the Receivables owed by the User under the Transmission
Agreement in an amount not to exceed $36,000,000; provided that at the
time each Receivable is purchased, the outstanding principal balance of
the Notes is reduced by an amount equal to the purchase price for such
Receivable.
(b) THE ISSUER. The Issuer shall execute and deliver the
Notes, the Note Purchase Agreement and the Trust Indenture in the form
of Exhibit D attached hereto, which shall create a lien on and security
interest in the Project and shall secure payment of the Notes and the
Receivables. The Issuer shall retain the Contractor to construct each
Segment of the Project pursuant to the Construction Contracts.
(c) THE INDENTURE TRUSTEE. The Indenture Trustee shall hold
the proceeds from the sale of the Notes in the Construction Account and
disburse such proceeds to the
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Issuer from time to time pursuant to and subject to the terms and
conditions of the Trust Indenture; such funds shall be applied to
costs of purchasing and constructing the New Equipment and Transaction
Costs. The Construction Account shall be part of the Trust Estate and
shall be subject to the security interests of the Trust Indenture.
(d) THE SUPPLIER. The Supplier shall absolutely and
unconditionally guaranty all obligations of the Issuer under the Notes,
the Note Purchase Agreement and the Trust Indenture. Pursuant to the
Transmission Agreement, the Supplier shall transmit to the User, using
the Project, electrical power and energy to be sold under the Power
Sales Agreement. Fees payable under the Transmission Agreement to
compensate the Supplier for the dedication of the Project to the User
and the power delivery capability of the Project shall be evidenced by
the Receivables. Upon the completion of each Segment to the
satisfaction of the Supplier, such Segment shall be sold by the Issuer
to the Supplier, a License Agreement for the use of the Property Rights
shall be granted by the User to the Supplier and applicable regulatory
requirements shall be satisfied. Simultaneously therewith, a Receivable
will be issued by the User to the Supplier under the Transmission
Agreement and sold to the Purchaser under the Receivables Purchase
Agreement.
(e) THE USER. The User will absolutely and unconditionally
guaranty all obligations of the Issuer under the Notes, the Note
Purchase Agreement and the Trust Indenture. The User shall purchase
electrical power and energy under the Power Sales Agreement in
accordance with the terms of the Transmission Agreement and issue the
Receivables thereunder.
Section 2.2. TIME AND PLACE OF CLOSING. The closing on the Date of
Closing shall take place at 10:00 am., Dallas time, at the offices of Xxxxxxxx &
Knight, P.C. 0000 Xxxxxxx Xxxxxx, 0000 Xxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxx or at
such other time and place as the parties hereto shall agree.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. CONDITIONS PRECEDENT TO PURCHASE OF NOTES AND RECEIVABLES.
The obligation of the Purchaser to purchase the Notes pursuant to the Note
Purchase Agreement and each Receivable pursuant to the Receivable Purchase
Agreement shall be subject to the fulfillment to the satisfaction of, or written
waiver by, the Purchaser prior to or on the date of purchase, of the following
conditions precedent:
Section 3.2. DOCUMENTS TO BE DELIVERED. All of the following documents
shall have been duly executed and delivered and in form, substance and date
satisfactory to the Purchaser:
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(a) The Transaction Documents described in Exhibit A
attached hereto.
(b) Corporate Documents of the Issuer:
(i) An "Omnibus Certificate" of the Secretary and of
the Chairman of the Board or President of the Issuer, which
shall contain the names and signatures of the officers of the
Issuer authorized to execute Transaction Documents and which
shall certify to the truth, correctness and completeness of
the following exhibits attached thereto: (1) a copy of
resolutions duly adopted by the Board of Directors of the
Issuer and in full force and effect at the time this Agreement
is entered into, authorizing the execution of this Agreement
and the other Transaction Documents delivered or to be
delivered in connection herewith and the consummation of the
transactions contemplated herein and therein, (2) a copy of
the charter documents of the Issuer and all amendments
thereto, certified by the appropriate official of the Issuer's
state of organization, and (3) a copy of any bylaws of the
Issuer;
(ii) A certificate (or certificates) of the due
formation, valid existence and good standing of the Issuer in
its state of organization, issued by the appropriate
authorities of such jurisdiction;
(iii) A "Compliance Certificate" of the Chairman of
the Board or President and of the chief financial officer of
the Issuer, in which such officers certify to the satisfaction
of the conditions set out in Section 3.9; and
(iv) Certificates of the Issuer's good standing and
due qualification to do business, issued by appropriate
officials in any states in which the Issuer owns property
subject to Transaction Documents.
(c) Corporate Documents of the Supplier:
(i) An "Omnibus Certificate" of the Secretary and of
the Chairman of the Board or President of the Supplier, which
shall contain the names and signatures of the officers of the
Supplier authorized to execute Transaction Documents and which
shall certify to the truth, correctness and completeness of
the following exhibits attached thereto: (1) a copy of general
resolutions duly adopted by the Board of Directors of the
Supplier in full force and effect at the time this Agreement
is entered into, authorizing the execution of this Agreement
and the other Transaction Documents delivered or to be
delivered in connection herewith and the consummation of the
transactions contemplated
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herein and therein, (2) a copy of the charter documents of
the Supplier and all amendments thereto, certified by the
appropriate official of the Supplier's state of organization,
and (3) a copy of any bylaws of the Supplier;
(ii) A certificate (or certificates) of the due
formation, valid existence and good standing of the Supplier
in its state of organization, issued by the appropriate
authorities of such jurisdiction;
(iii) A "Compliance Certificate" of the Chairman of
the Board or President and of the Treasurer of the Supplier,
in which such officers certify to the satisfaction of the
conditions set out in Section 3.9; and
(iv) Certificates of the Supplier's good standing and
due qualification to do business, issued by appropriate
officials in any states in which the Supplier owns property
subject to Transaction Documents.
(d) Corporate Documents of the User:
(i) An "Omnibus Certificate" of the Secretary and of
the Chairman of the Board or President of the User, which
shall contain the names and signatures of the officers of the
User authorized to execute Transaction Documents and which
shall certify to the truth, correctness and completeness of
the following exhibits attached thereto: (1) a copy of
resolutions duly adopted by the Board of Directors of the User
and in full force and effect at the time this Agreement is
entered into, authorizing the execution of this Agreement and
the other Transaction Documents delivered or to be delivered
in connection herewith and the consummation of the
transactions contemplated herein and therein, (2) a copy of
the charter documents of the User and all amendments thereto,
certified by the appropriate official of the User's state of
organization, and (3) a copy of any bylaws of the User;
(ii) A certificate (or certificates) of the due
formation, valid existence and good standing of the User in
its state of organization, issued by the appropriate
authorities of such jurisdiction;
(iii) A "Compliance Certificate" of the Chairman of
the Board or President and of the chief financial officer of
the User, in which such officers certify to the satisfaction
of the conditions set out in Section 3.9; and
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(iv) Certificates of the User's good standing and due
qualification to do business, issued by appropriate officials
in any states in which the User owns property subject to
Transaction Documents.
(e) Documentation evidencing compliance with all material
environmental laws and regulations and otherwise satisfactory to the
Supplier concerning the Property Rights.
Section 3.3. OPINIONS. On the Date of Closing the Purchaser shall have
received the following opinions:
(a) an opinion addressed to the Purchaser, from Xxxxxxxx &
Knight, P.C., special Texas counsel for the Purchaser, in form and
substance satisfactory to the Purchaser;
(b) an opinion addressed to the Purchaser from Hinkle, Cox,
Xxxxx, Xxxxxxxx & Xxxxxxx, special counsel for the Supplier, in the
form of Exhibit E-1 attached hereto;
(c) an opinion addressed to the Purchaser, from Xxxxxx &
Xxxxxxxxx, P.C., special counsel for the Issuer and the User, and
opinions from special federal and Texas regulatory counsel to the
Issuer and the User, all in the form of Exhibit E-2 attached hereto;
and
(d) an opinion addressed to the Purchaser from Xxxxxxx &
Xxxxx, L.L.P, special counsel for the Indenture Trustee, in the form of
Exhibit E-3 attached hereto.
Section 3.4. FILINGS AND RECORDINGS. All documents, if any,
necessary or advisable to perfect (a) the rights, title and interest of the
Issuer and the Supplier in and to the Receivables, the Facility and the
remainder of the Trust Estate and (b) for the benefit of the Indenture
Trustee a first and prior security interest in the Trust Estate shall have
been duly made, executed, filed and delivered, PROVIDED, HOWEVER, that upon
the sale of a Segment by the Issuer to the Supplier, the security interest
granted by the Supplier in such Segment shall be subordinate to the Senior
Indenture.
Section 3.5. AUTHORIZATIONS; EXECUTION AND DELIVERY OF DOCUMENTS.
The Transaction Documents described in Exhibit A attached hereto shall have
been duly authorized, executed and delivered by the respective parties
thereto in the forms attached hereto and shall be in full force and effect on
the Date of Closing without any event or condition having occurred or
existing which constitutes, or with the giving of notice or lapse of time or
both would constitute, a default thereunder or breach thereof, or would give
any party thereto the right to terminate any of such documents, and an
executed counterpart of each document shall have been delivered to the
Indenture Trustee, the Supplier, the User, the Issuer and the Purchaser.
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Section 3.6. ILLEGALITY, ETC. No change shall have occurred on or
prior to such Date of Closing in Applicable Laws that, in the opinion of the
Purchaser, (a) would make it illegal for the Purchaser to participate in any
of the transactions contemplated by the Transaction Documents, or (b) would
subject the Purchaser to any material penalty, fine, liability or sanction
not contemplated by a Transaction Document.
Section 3.7. ACTIONS, PROCEEDINGS. No action, proceeding or
investigation shall have been instituted, nor shall governmental action
before any court or Governmental Authority or agency be threatened, nor shall
any order, judgment or decree have been issued or proposed to be issued by
any court or Governmental Authority or agency at the time of the Date of
Closing, which would set aside, restrain, enjoin or prevent the consummation
of the transactions contemplated hereby or by the other Transaction Documents
or, if any of the foregoing is disclosed to the Purchaser on the Disclosure
Schedule, is not acceptable to the Purchaser or its counsel at the time of
the Date of Closing.
Section 3.8. NECESSARY ACTIONS, PERMITS, ETC. All actions,
approvals, consents, waivers, exemptions, variances, franchises, orders,
permits, authorizations, rights and licenses required to be taken, given or
obtained, as the case may be, by or from any Federal, state or other
Governmental Authority or agency, or by or from any Person having an interest
in the Site or by or from any trustee or holder of any indebtedness or
obligations of the Issuer, the Supplier or the User (including without
limitation the authorization of the New Mexico Public Utility Commission)
that are then necessary or, in the opinion of the Purchaser or its counsel,
advisable in connection with the transactions contemplated by the Transaction
Documents (including, without limitation, the construction and operation of
the Facility and the use and occupancy of the Site), shall have been duly
taken, given or obtained, as the case may be, shall be in full force and
effect on the Date of Closing, shall not be subject to any pending
proceedings or appeals (administrative, judicial or otherwise) and either (a)
the time within which any appeal therefrom may be taken or review thereof may
be obtained has expired, or (b) no review thereof may be obtained or appeal
therefrom taken, and shall be adequate to authorize the consummation of the
transactions contemplated by the Transaction Documents and the performance by
the Issuer, the Supplier or the User of their respective obligations under
such thereof to which each is a party, and the Purchaser has no reason to
believe that any such actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
that shall be necessary or advisable in connection with such transactions
subsequent to the Date of Closing cannot be obtained in a timely manner in
the due course of the operation of the Project or, if any of the foregoing is
disclosed to the Purchaser on the Disclosure Schedule, is not acceptable to
the Purchaser or its counsel at the time of the Date of Closing.
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Section 3.9. REPRESENTATIONS AND WARRANTIES. On the Date of Closing,
the following statements shall be true and accurate (a) the representations
and warranties of the Issuer, the Supplier and the User, as the case may be,
contained herein, and in each other Transaction Document to which any of them
is a party, are true and accurate on and as of the Date of Closing as though
made on and as of the Date of Closing; (b) each of the Issuer, the Supplier
and the User has performed and complied with all agreements and conditions
contained herein and in each other Transaction Document to which it is a
party required to be performed or complied with by it on or prior to the Date
of Closing; (c) no event or condition has occurred and is continuing, or
would result from the consummation or any transaction contemplated by the
Transaction Documents to which such Person is a party, which constitutes a
default by the Issuer, the Supplier or the User under any such Transaction
Document; and (d) each Transaction Document to which the Issuer, the Supplier
or the User to which it is a party remains in full force and effect with
respect to such Person without any event or condition having occurred or
existing and continuing that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default by such Person thereunder
or breach thereof or would give any other party thereto the right to
terminate such Transaction Document.
Section 3.10. UCC SEARCHES. The Purchaser shall have received UCC
searches in form and substance acceptable to the Purchaser.
Section 3.11. FEES. All taxes, fees (including fees and
disbursements of the Purchaser's counsel) and other charges payable in
connection with the execution, delivery, recordation and filing of all the
documents and instruments referred to in the Transaction Documents shall have
been paid in full.
Section 3.12. CHANGE IN FINANCIAL CONDITION: THE ISSUER, THE
SUPPLIER AND THE USER.
(a) The Purchaser shall have determined that no material adverse
change in the Consolidated assets, liabilities, operations or financial
condition of the Issuer from that set forth in the financial statements of
the Issuer dated as of the Date of Closing shall have occurred.
(b) The Purchaser shall have determined that no material adverse
change in the Consolidated assets, liabilities, operations or financial
condition of the Supplier from that set forth in the audited Consolidated
financial statements of the Supplier as of August 31, 1992 and for the period
then ended shall have occurred.
(c) The Purchaser shall be satisfied that no material adverse change
in the Consolidated assets, liabilities, operations or financial condition of
the User from that set forth in the audited Consolidated financial statements
of the User as
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of March 31, 1992 and for the period then ended shall have occurred.
Section 3.13. DATE OF CLOSING. The Date of Closing shall occur on
September 9, 1993 or such later date prior to September 15, 1993 as agreed to
by the parties hereto.
Section 3.14. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of each other party to this Agreement contained herein and in
each other Transaction Document to which such party is a party shall be true
and accurate on and as of the Date of Closing as though made on and as of
such Date of Closing, except to the extent that such representations and
warranties relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date).
Section 3.15. REGULATORY ACTS. The consummation of the transactions
contained herein or contemplated hereby or in any Transaction Documents shall
not subject the Purchaser or any participant to, nor violate in whole or in
part, any provision of the Regulatory Acts or any other Applicable Law which
in the opinion of such participant may impose, by operation, implication or
otherwise, an unduly onerous burden on the Purchaser or on such participant,
or cause the Purchaser to be a "holding company", a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" within the meaning
of the Holding Company Act.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer makes the following representations and warranties to each of the
other parties hereto:
(a) NO DEFAULT. The Issuer is not in default in the
performance of any of the covenants and agreements contained herein. No
event has occurred and is continuing which constitutes a Default.
(b) ORGANIZATION AND GOOD STANDING. The Issuer is a special
purpose corporation duly organized, validly existing and in good
standing under the laws of its state of organization for the special
purpose of constructing the New Equipment, having all corporate power
required to carry on its business and enter into and carry out the
transactions contemplated hereby. The Issuer is duly qualified, in good
standing, and authorized to do business in all other jurisdictions
within the United States wherein the character of the properties owned
or held by it or the nature of the business transacted by it makes such
qualification necessary.
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(c) AUTHORIZATION. The Issuer has duly taken all corporate
action necessary to authorize the execution and delivery by it of the
Transaction Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the
performance of its obligations thereunder.
(d) NO CONFLICTS OR CONSENTS. Except as may be disclosed on
the Disclosure Schedule, the execution and delivery by the Issuer of
the Transaction Documents to which it is a party, the performance by it
of its obligations under the Transaction Documents, and the
consummation of the transactions contemplated by the various
Transaction Documents, do not and will not, as of the date hereof and
each other date on which this warranty and representation is made
(i) conflict with any provision of (1) any domestic or foreign law,
statute, rule or regulation, (2) the articles or certificate of
incorporation, bylaws or charter of the Issuer, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon the
Issuer, (ii) result in the acceleration of any Debt owed by the Issuer,
or (iii) result in or require the creation of any Lien upon any assets
or properties of the Issuer, except as expressly contemplated in the
Transaction Documents. Except as expressly contemplated in the
Transaction Documents or in the Disclosure Schedule, no consent,
approval, authorization or order of, and no notice to or filing with,
any court or governmental authority or third party is required in
connection with the execution, delivery or performance by the Issuer
of any Transaction Document or to consummate any transactions
contemplated by the Transaction Documents.
(e) ENFORCEABILITY. This Agreement is, and the other
Transaction Documents to which the Issuer is a party, when duly
executed and delivered, will be, legal, valid and binding obligations
of the Issuer, enforceable in accordance with their terms, except as
such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors'
rights (whether in a proceeding at law or in equity).
(f) INITIAL FINANCIAL STATEMENTS. The Initial Financial
Statements of the Issuer fairly present the Issuer's financial position
at the date thereof. Since the date of the Initial Financial Statements
of the Issuer, no material adverse change has occurred in the Issuer's
financial condition or businesses. The Initial Financial Statements
were prepared in accordance with GAAP.
(g) OTHER DEBT. The Issuer has no outstanding Debt of any kind
(including contingent obligations, tax assessments, and unusual forward
or long-term commitments) which is, in the aggregate, material to the
Issuer.
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(h) FULL DISCLOSURE. No certificate, statement or other
information delivered herewith or heretofore by the Issuer to the
Purchaser in connection with the negotiation of the Transaction
Documents or in connection with any transaction contemplated thereby,
and to the best of the Issuer's knowledge, none of the Transaction
Documents, contains any untrue statement of a material fact or omits to
state any material fact known to the Issuer (other than industry-wide
risks normally associated with the types of businesses conducted by the
Issuer) necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made. There is no fact
known to the Issuer that has not been disclosed to the Purchaser in
writing that could materially and adversely affect the Issuer's
properties, business, prospects or condition (financial or otherwise).
(i) LITIGATION. Except as may be disclosed on the Disclosure
Schedule, there are no actions, suits or legal, equitable, arbitrative
or administrative proceedings pending, or, to the knowledge of the
Issuer, threatened, against the Issuer before any federal, state,
municipal or other court, department, commission, body, board, bureau,
agency, or instrumentality, domestic or foreign, and there are no
outstanding judgments, injunctions, writs, rulings or orders by any
such governmental entity against the Issuer or its stockholders,
directors or officers which (taking into account all known material
facts and circumstances) materially and adversely affect the Issuer,
its ownership or use of any of its assets or properties, its business
or financial condition or prospects, or the right or ability of the
Issuer to enter into the Transaction Documents to which it is a party
or to consummate the transactions contemplated thereby or to perform
its obligations thereunder, which have or may have such effect.
(j) ERISA. The execution and delivery of the Transaction
Documents on the Date of Closing will not involve any prohibited
transaction within the meaning of ERISA or Code section 4975. The
Issuer has no ERISA Plans.
(k) ENVIRONMENTAL AND OTHER LAWS. The Issuer is conducting its
business in material compliance with all applicable federal, state and
local laws, including without limitation those pertaining to
environmental matters; none of the operations of the Issuer is the
subject of federal, state or local investigation evaluating whether any
material remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent into the
environment. The Issuer has not (and to the best knowledge of the
Issuer, no other Person has) filed any notice under any federal, state
or local law indicating that the Issuer is responsible for the release
into the environment, or the improper storage, of any material amount
of any hazardous or toxic waste, substance or constituent, or that any
such
11
waste, substance or constituent has been released, or is improperly
stored, upon any property of the Issuer. The Issuer does not
otherwise have any known material contingent liability in connection
with the release into the environment, or the improper storage, of any
such waste, substance or constituent.
(l) NAMES AND PLACES OF BUSINESS. The Issuer has not, during
the preceding five years, had, been known by, or used any other
corporate, trade, or fictitious name. The chief executive office and
principal place of business of the Issuer are (and since its formation
have been) located at the address of the Issuer set out in Section 8.1.
The Issuer has no other office or place of business.
(m) THE ISSUER'S SUBSIDIARIES. The Issuer does not have any
Subsidiaries or own any stock in any other corporation or association.
The Issuer is not a member of any general or limited partnership, joint
venture or association of any type whatsoever.
(n) CONSTRUCTION CONTRACTS. Exhibit F attached hereto contains
a listing of, and true, correct and complete copies of, all
Construction Contracts relating that portion of the construction of the
Facility for which funds have been requested to be disbursed from the
Construction Account pursuant to Section 4.03 of the Trust Indenture,
all required consents of regulatory authorities relating to such
construction, including without limitation a certificate of convenience
and necessity issued by the Texas Public Utilities Commission with
respect to the construction of such Segment, and all process or license
agreements relating to the operation of such portion of the Facility.
(o) NO INVESTMENT COMPANY. The Issuer is not now and on the
Date of Closing will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(p) REGULATORY ACTS: THE ISSUER. The Issuer is not now and on
the Date of Closing will not be a "holding company," or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" within the meaning of the Holding
Company Act or a "public utility" within the meaning of the Federal
Power Act or the Texas Public Utility Regulatory Act of 1975.
(q) NO PUBLIC OFFERING. Neither the Issuer nor any Person
acting on its behalf and with its knowledge has directly or indirectly
offered or sold any Note or the investment in the Project or any
similar securities to, or has otherwise approached or negotiated to or
with any Person with respect thereto, so as to bring any of the
transactions
12
contemplated hereby within Section 5 of the Securities Act of 1933,
as amended.
(r) OTHER BUSINESS. The Issuer has not engaged in any business
transactions unrelated to the development, construction, operation and
financing of the Project.
(s) NO LIENS. The Issuer represents and warrants to, and
covenants with, each other party hereto that on the Date of Closing
there will exist nc Liens on the Project arising by, through or under
the Issuer.
(t) SOLVENCY. The Issuer is not "insolvent" (that is, the sum
of the Issuer's absolute and contingent liabilities, including the
obligations under the Notes, does not exceed the fair market value of
the Issuer's assets). The Issuer's capital as set forth in the Issuer's
Initial Financial Statement is adequate for the businesses in which the
Issuer is engaged and intends to be engaged. The Issuer has not
incurred under the Transaction Documents, nor does the Issuer intend to
incur or believe that it will incur, debts which will be beyond its
ability to pay as such debts mature.
Section 4.2. REPRESENTATIONS AND WARRANTIES OF THE SUPPLIER. The
Supplier makes the following representations and warranties to each of the other
parties hereto:
(a) NO DEFAULT. The Supplier is not in default in the
performance of any of the covenants and agreements contained herein or
in any other Transaction Document. No event has occurred and is
continuing which constitutes a Default.
(b) ORGANIZATION AND GOOD STANDING. The Supplier is a
corporation duly organized, validly existing and in good standing under
the laws of its state of organization, having all corporate power
required to carry on its business and enter into and carry out the
transactions contemplated hereby. The Supplier is duly qualified, in
good standing, and authorized to do business in all other jurisdictions
within the United States wherein the character of the properties owned
or held by it or the nature of the business transacted by it makes such
qualification necessary.
(c) AUTHORIZATION. The Supplier has duly taken all corporate
action necessary to authorize the execution and delivery by it of the
Transaction Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the
performance of its obligations thereunder.
(d) NO CONFLICTS OR CONSENTS. The execution and delivery by
the Supplier of the Transaction Documents to which it is a party, the
performance by it of its obligations under the Transaction Documents,
and the
13
consummation of the transactions contemplated by the various
Transaction Documents, do not and will not, as of the date hereof and
each other date on which this representation and warranty is made (i)
conflict with any provision of (1) any domestic or foreign law,
statute, rule or regulation, (2) the articles or certificate of
incorporation, bylaws or charter of the Supplier, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon the
Supplier, (ii) result in the acceleration of any Debt owed by the
Supplier, or (iii) result in or require the creation of any Lien upon
any assets or properties of the Supplier, except as expressly
contemplated in the Transaction Documents. Except as expressly
contemplated in the Transaction Documents no consent, approval,
authorization or order of, and no notice to or filing with, any court
or governmental authority or third party is required in connection with
the execution, delivery or performance by the Supplier of any
Transaction Document or to consummate any transactions contemplated by
the Transaction Documents.
(e) ENFORCEABILITY. This Agreement is, and the other
Transaction Documents to which the Supplier is a party, when duly
executed and delivered, will be, legal, valid and binding obligations
of the Supplier, enforceable in accordance with their terms, except as
such enforcement may be limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of creditors'
rights (whether in a proceeding at law or in equity).
(f) INITIAL FINANCIAL STATEMENTS. The Initial Financial
Statements fairly present the Supplier's Consolidated financial
position at the respective dates thereof and the Consolidated results
of the Supplier's operations and the Supplier's Consolidated cash flows
for the respective periods thereof. Since the date of the audited
annual Initial Financial Statements no material adverse change has
occurred in the Supplier's financial condition or businesses or in the
Supplier's Consolidated financial condition or businesses, except as
reflected in the quarterly Initial Financial Statements or in the
Disclosure Schedule. All Initial Financial Statements were prepared in
accordance with GAAP; provided that the unaudited Initial Financial
Statements have been prepared without footnotes or year-end
adjustments.
(g) OTHER DEBT. The Supplier has no outstanding Debt of any
kind (including contingent obligations, tax assessments, and unusual
forward or long-term commitments) which is, in the aggregate, material
to the Supplier or material with respect to the Supplier's Consolidated
financial condition and not shown in the Initial Financial Statements
or disclosed in the Disclosure Schedule.
14
(h) FULL DISCLOSURE. No certificate, statement or other
information delivered herewith or heretofore by the Supplier to the
Purchaser in connection with the negotiation of the Transaction
Documents or in connection with any transaction contemplated hereby,
and to the best of the Supplier's knowledge none of the Transaction
Documents, contains any untrue statement of a material fact or omits
to state any material fact known to the Supplier (other than
industry-wide risks normally associated with the types of businesses
conducted by the Supplier) necessary to make the statements contained
herein or therein not misleading as of the date made or deemed made.
There is no fact known to the Supplier that has not been disclosed to
the Purchaser in writing which could materially and adversely affect
the Supplier's properties, business, prospects or condition (financial
or otherwise) or the Supplier's Consolidated properties, businesses,
prospects or condition (financial or otherwise).
(i) LITIGATION. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions,
suits or legal, equitable, arbitrative or administrative proceedings
pending, or, to the knowledge of the Supplier, threatened, against the
Supplier before any federal, state, municipal or other court,
department, commission, body, board, bureau, agency, or
instrumentality, domestic or foreign, which do or may (taking into
account all known material facts and circumstances) materially and
adversely affect the Supplier or, on a Consolidated basis, the Supplier
and its properly Consolidated Subsidiaries, their ownership or use of
any of their assets or properties, their businesses or financial
condition or prospects, or the right or ability of the Supplier to
enter into the Transaction Documents to which it is a party or to
consummate the transactions contemplated thereby or to perform its
obligations thereunder and (ii) there are no outstanding judgments,
injunctions, writs, rulings or orders by any such governmental entity
against the Supplier or its stockholders, partners, directors or
officers which do or may (taking into account all known material facts
and circumstances) materially and adversely affect the Supplier or, on
a Consolidated basis, the Supplier and its properly Consolidated
Subsidiaries, their ownership or use of any of their assets or
properties, their businesses or financial condition or prospects, or
the right or ability of the Supplier to enter into the Transaction
Documents to which it is a party or to consummate the transactions
contemplated thereby or to perform its obligations thereunder.
(j) ERISA LIABILITIES. Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination
Event has occurred with respect to any ERISA Plan and the Supplier is
in compliance with ERISA in all material respects. The Supplier is not
required to
15
contribute to, and does not have, any other absolute or contingent
liability in respect of, any "multi-employer plan" as defined in
Section 4001 of ERISA.
(k) ENVIRONMENTAL AND OTHER LAWS. Except as disclosed in the
Disclosure Schedule: (i) the Supplier is conducting its businesses in
material compliance with all applicable federal, state and local laws,
including without limitation those pertaining to environmental matters;
(ii) none of the operations of the Supplier is the subject of federal,
state or local investigation evaluating whether any material remedial
action is needed to respond to a release of any hazardous or toxic
waste, substance or constituent into the environment; (iii) the
Supplier has not (and to the best knowledge of the Supplier, no other
Person has) filed any notice under any federal, state or local law
indicating that the Supplier is responsible for the release into the
environment, or the improper storage, of any material amount of any
hazardous or toxic waste, substance or constituent, or that any such
waste, substance or constituent has been released, or is improperly
stored, upon any property of the Supplier; and (iv) the Supplier does
not otherwise have any known material contingent liability in
connection with the release into the environment, or the improper
storage, of any such waste, substance or constituent.
(l) NAMES AND PLACES OF BUSINESS. The Supplier has not, during
the preceding five years, had, been known by, or used any other
corporate, trade, or fictitious name, except as disclosed in the
Disclosure Schedule. Except as otherwise indicated in the Disclosure
Schedule, the chief executive office and principal place of business of
the Supplier are (and since its formation have been) located at the
address of the Supplier set out in Section 8.1. Except as indicated in
the Disclosure Schedule, the Supplier has no other office or place of
business.
(m) THE SUPPLIER'S SUBSIDIARIES. The Supplier does not
presently have any Subsidiaries or own any stock in any other
corporation or association except those listed in the Disclosure
Schedule. The Supplier is not a member of any general or limited
partnership, joint venture or association of any type whatsoever except
those listed in the Disclosure Schedule. As of the date hereof the
Supplier owns, directly or indirectly, the equity interest in each of
its Subsidiaries as indicated in the Disclosure Schedule.
(n) NO INVESTMENT COMPANY. The Supplier is not now and on the
Date of Closing will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(o) REGULATORY ACTS: OTHER PERSONS. Assuming no existing facts
which currently subject the Purchaser, any
16
Holder of any Receivable or any Note, the Indenture Trustee nor any
Affiliate of any of Them to regulation under the Regulatory Acts,
neither the Purchaser, any Holder of any Receivable or any Note, the
Indenture Trustee nor any Affiliate of any of them will become
subject to regulation under the Regulatory Acts (i) solely by reason
of execution and delivery of the Transaction Documents, (ii) solely by
reason of the sale and/or purchase of the Notes, or (iii) solely by
reason of the exercise of any remedy pursuant to the Transaction
Documents which results solely in the sale or other disposition of the
Trust Estate or (iv) as a result of the combination of the activities
described in the immediately preceding clauses (i) through (iii);
provided, however, that the exercise of certain other remedies may
subject the Purchaser, any Holder of any Receivable or any Note, the
Indenture Trustee or any Affiliate of any of them to regulation under
the Regulator Acts.
(p) NO PUBLIC OFFERING. Neither the Supplier nor any Person
acting on its behalf and with its knowledge has directly or indirectly
offered or sold any Note or the equity investment in the Project or any
similar securities to, or has otherwise approached or negotiated to or
with any Person with respect thereto, so as to bring any of the
transactions contemplated hereby within Section 5 of the Securities Act
of 1933, as amended.
(q) NO LIENS. The Supplier represents and warrants to, and
covenants with, each other party hereto that on the Date of Closing
there will exist no Liens on (i) the rights of the Supplier under the
Transmission Agreement or the Power Sales Agreement, insofar as it
relates to the Transmission Agreement and the Receivables, or (ii) on
the Project (other than Liens upon the Existing Equipment under the
Senior Indenture) arising by, through or under the Supplier.
(r) SOLVENCY. The Supplier is not "insolvent" (that is, the
sum of the Supplier's absolute and contingent liabilities, including
the obligations under the Notes, does not exceed the fair market value
of the Supplier's assets). The Supplier's capital is adequate for the
businesses in which the Supplier is engaged and intends to be engaged.
The Supplier has not incurred under the Transaction Documents, nor does
the Supplier intend to incur or believe that it will incur, debts which
will be beyond its ability to pay as such debts mature.
(s) BUSINESS PURPOSE. The construction of the New Equipment is
required in order for the Supplier to sell electric power and energy to
the User under the Power Sales Agreement and to transmit such electric
power and energy to the User pursuant to the Transmission Agreement.
The sale of the Receivables provides refinancing for the New Equipment
and financing for the Existing Equipment on terms
17
more favorable to the Supplier and the Issuer than the terms of the
Notes. The Receivables constitute fair and adequate consideration to
the Supplier for its obligations under the Transmission Agreement and
the Purchase Price for the Receivables is fair and adequate
consideration to the Supplier for its obligations under the
Receivables Purchase Agreement.
(t) POWER SALE: AGREEMENT AND TRANSMISSION AGREEMENT. Exhibit
G attached hereto is a true, complete and correct copy of the Power
Sales Agreement. Exhibit H attached hereto is a true, complete and
correct copy of the Transmission Agreement.
Section 4.3. REPRESENTATIONS AND WARRANTIES OF THE USER. The User makes
the following representations and warranties to each of the other parties
hereto:
(a) NO DEFAULT. The User is not in default in the performance
of any of the covenants and agreements contained herein or in any other
Transaction Document. No event has occurred and is continuing which
constitutes a Default.
(b) ORGANIZATION AND GOOD STANDING. The User is a corporation
duly organized, validly existing and in good standing under the laws of
its state of organization, having all corporate power required to carry
on its business and enter into and carry out the transactions
contemplated hereby. The User is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within the United
States wherein the character of the properties owned or held by it or
the nature of the business transacted by it makes such qualification
necessary.
(c) AUTHORIZATION. The User has duly taken all corporate
action necessary to authorize the execution and delivery by it of the
Transaction Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the
performance of its obligations thereunder.
(d) NO CONFLICTS OR CONSENTS. The execution and delivery by
the User of the Transaction Documents to which it is a party, the
performance by it of its obligations under the Transaction Documents,
and the consummation of the transactions contemplated by the various
Transaction Documents, do not and will not, as of the date hereof and
each other date on which this representation and warranty is made (i)
conflict with any provision of (1) any domestic or foreign law,
statute, rule or regulation, (2) the articles or certificate of
incorporation, bylaws or charter of the User, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon the
User, (ii) result in the acceleration of any Debt owed by the User, or
(iii) result in or require the creation of any Lien upon any
18
assets or properties of the User, except as expressly contemplated in
the Transaction Documents. Except as contemplated in the Transaction
Documents or in the Disclosure Schedule, no consent, approval,
authorization or order of, and no notice to or filing with, any court
or governmental authority or third party is required in connection with
the execution, delivery or performance by the User of any Transaction
Document or to consummate any transactions contemplated by the
Transaction Documents. The agreements defined as "Other Agreements" in
the opinion of Xxx X. Xxxxx, Xx. delivered to Purchaser on the Closing
Date are the only material agreements applicable to or binding upon the
User.
(e) ENFORCEABILITY. This Agreement is, and the other
Transaction Documents to which the User is a party, when duly executed
and delivered, will be, legal, valid and binding obligations of the
User, enforceable in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights
(whether in a proceeding at law or in equity).
(f) INITIAL FINANCIAL STATEMENTS. The Initial Financial
Statements fairly present the User's Consolidated financial position at
the respective dates thereof and the Consolidated results of the User's
operations and the User's Consolidated cash flows for the respective
periods thereof. Since the date of the audited annual Initial Financial
Statements no material adverse change has occurred in the User's
financial condition or businesses or in the User's Consolidated
financial condition or businesses, except as reflected in the quarterly
Initial Financial Statements or in the Disclosure Schedule. All Initial
Financial Statements were prepared in accordance with GAAP; provided
that the unaudited Initial Financial Statements have been prepared
without footnotes or year-end adjustments.
(g) OTHER DEBT. The User has no outstanding Debt of any kind
(including contingent obligations, tax assessments, and unusual forward
or long-term commitments) which is, in the aggregate, material to the
User or material with respect to the User's Consolidated financial
condition and not shown in the Initial Financial Statements or
disclosed in the Disclosure Schedule.
(h) FULL DISCLOSURE. No certificate, statement or other
information delivered herewith or heretofore by the User to the
Purchaser in connection with the negotiation of the Transaction
Documents or in connection with any transaction contemplated hereby,
and to the best of the User's knowledge, none of the Transaction
Documents, contains any untrue statement of a material fact or omits to
state any material fact known to the User (other than industry-wide
risks normally associated with the types of
19
businesses conducted by the User) necessary to make the statements
contained herein or therein not misleading as of the date made or
deemed made. There is no fact known to the User that has not been
disclosed to the Purchaser in writing which could materially and
adversely affect the User's properties, business, prospects or
condition (financial or otherwise) or the User's Consolidated
properties, businesses, prospects or condition (financial or
otherwise).
(i) LITIGATION. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions,
suits or legal, equitable, arbitrative or administrative proceedings
pending, or to the knowledge of the User, threatened, against the User
before any federal, state, municipal or other court, department,
commission, body, board, bureau, agency, or instrumentality, domestic
or foreign, which do or may (taking into account all known material
facts and circumstances) materially and adversely affect the User or,
on a Consolidated basis, the User and its properly Consolidated
Subsidiaries, their ownership or use of any of their assets or
properties, their businesses or financial condition or prospects, or
the right or ability of the User to enter into the Transaction
Documents to which it is a party or to consummate the transactions
contemplated thereby or to perform its obligations thereunder and (ii)
there are no outstanding judgments, injunctions, writs, rulings or
orders by any such governmental entity against the User or its members,
partners, directors or officers which do or may (taking into account
all known material facts and circumstances) materially and adversely
affect the User or, on a Consolidated basis, the User and its properly
Consolidated Subsidiaries, their ownership or use of any of their
assets or properties, their businesses or financial condition or
prospects, or the right or ability of the User to enter into the
Transaction Documents to which it is a party or to consummate the
transactions contemplated thereby or to perform its obligations
thereunder.
(j) ERISA LIABILITIES. Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination
Event has occurred with respect to any ERISA Plan and the User is in
compliance with ERISA in all material respects. The User is not
required to contribute to, and does not have any other absolute or
contingent liability in respect of, any "multi-employer plan" as
defined in Section 4001 of ERISA.
(k) ENVIRONMENTAL AND OTHER LAWS. Except as disclosed in the
Disclosure Schedule: (i) The User is conducting its businesses in
material compliance with all applicable federal, state and local laws,
including without limitation those pertaining to environmental matters;
(ii) none of the operations of the User is the subject of federal,
state or local investigation evaluating whether any material remedial
20
action is needed to respond to a release of any hazardous or toxic
waste, substance or constituent, into the environment; (iii) the User
has not (and to the best knowledge of the User, no other Person has)
filed any notice under any federal, state or local law indicating that
the User is responsible for the release into the environment, or the
improper storage, of any material amount of any hazardous or toxic
waste, substance or constituent, or that any such waste, substance or
constituent has been released, or is improperly stored, upon any
property of the User; and (iv) the User does not otherwise have any
known material contingent liability in connection with the release into
the environment, or the improper storage, of any such waste, substance
or constituent.
(l) NAMES AND PLACES OF BUSINESS. The User has not, during the
preceding five years, had, been known by, or used any other corporate,
trade, or fictitious name, except as disclosed in the Disclosure
Schedule. Except as otherwise indicated in the Disclosure Schedule, the
chief executive office and principal place of business of the User are
(and since its formation have been) located at the address of the User
set out in Section 8.1. Except as indicated in the Disclosure Schedule,
the User has no other office or place of business.
(m) THE USER'S SUBSIDIARIES. The User does not presently have
any Subsidiaries or own any stock in any other corporation or
association except those listed in the Disclosure Schedule. The User is
not a member of any general or limited partnership, joint venture or
association of any type whatsoever except those listed in the
Disclosure Schedule. As of the date hereof the User owns, directly or
indirectly, the equity interest in each of its Subsidiaries as
indicated in the Disclosure Schedule.
(n) PROPERTY RIGHTS. As of the date of each disbursement by
the Indenture Trustee of any funds from the Construction Account to the
Issuer pursuant to Section 4.03 of the Trust Indenture, the User has a
valid fee, leasehold or easement interest in and to each portion of the
Site upon which any disbursed funds have previously been or will be
used, and a valid interest in and to the other Property Rights relating
to such portion, in all cases free and clear of Liens other than
Permitted Liens. As of the date of each such disbursement, the Property
Rights are, and at all times during the term of the Receivables
Purchase Agreement will be, sufficient (i) to permit the Facility to be
located on that portion of the Site upon which any disbursed funds have
previously or will be used, (ii) to enable the User and its
contractors, agents and assigns to operate that portion of the Facility
located on that portion of the Site upon which any disbursed funds have
previously or will be used for the term of the Receivables Purchase
Agreement (after termination of the Receivables Purchase Agreement or
upon or
21
following the exercise of remedies available to the Holders of the
Receivables under the Receivables Purchase Agreement), and (iii) to
enable that portion of the Facility located on that portion of the Site
upon which any disbursed funds have previously or will be used to be
operated on a commercial basis in the manner in which it is
contemplated without any other rights or services required other than
the Property Rights and other rights and services generally available
on commercially reasonable terms.
(o) CONSTRUCTION CONTRACTS. Exhibit F attached hereto contains
a listing of, and true, correct and complete copies of, all
Construction Contracts relating to that portion of the construction of
the Facility for which funds have been requested to be disbursed from
the Construction Account pursuant to Section 4.03 of the Trust
Indenture.
(p) NO INVESTMENT COMPANY. The User is not now and on the Date
of Closing will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(q) REGULATORY ACTS: OTHER PERSONS. Assuming no existing facts
which currently subject the Purchaser, any Holder of any Receivable or
any Note, the Indenture Trustee nor any Affiliate of any of them to
regulation under the Regulatory Acts, neither the Purchaser, any Holder
of any Receivable or any Note, the Indenture Trustee nor any Affiliate
of any of them will become subject to regulation under the Regulatory
Acts (i) solely by reason of execution and delivery of the Transaction
Documents, (ii) solely by reason of the sale and/or purchase of the
Notes, or (iii) solely by reason of the exercise of any remedy pursuant
to the Transaction Documents which results solely in the sale or other
disposition of the Trust Estate or (iv) as a result of the combination
of the activities described in the immediately preceding clauses (i)
through (iii); provided, however, that the exercise of certain other
remedies may subject the Purchaser, any Holder of any Receivable or any
Note, the Indenture Trustee or any Affiliate of any of them to
regulation under the Regulator Acts.
(r) NO PUBLIC OFFERING. Neither the User nor any Person acting
on its behalf and with its knowledge has directly or indirectly offered
or sold any Note or the equity investment in the Project or any similar
securities to, or has otherwise approached or negotiated to or with any
Person with respect thereto, so as to bring any of the transactions
contemplated hereby within Section 5 of the Securities Act of 1933, as
amended.
(s) DESCRIPTIONS. The description set forth in Exhibit B to
the Trust Indenture is a true, correct, complete and accurate
description of the Facility in all material respects and the
description set forth in Exhibit A
22
of the Trust Indenture is a true, correct, complete and accurate
description of the Site.
(t) NO LIENS. The User represents and warrants to, and
covenants with, each other party hereto that on the Date of Closing
there will exist no Liens on the Project arising by, through or under
the User.
(u) SOLVENCY. The User is not "insolvent" (that is, the sum of
the User's absolute and contingent liabilities, including the
obligations under the Notes, does not exceed the fair market value of
the User's assets). The User's capital is adequate for the businesses
in which the User is engaged and intends to be engaged. The User has
not incurred under the Transaction Documents, nor does the User intend
to incur or believe that it will incur, debts which will be beyond its
ability to pay as such debts mature.
(v) BUSINESS PURPOSE. The construction of the New Equipment is
required in order for the Supplier to sell electric power and energy to
the User under the Power Sales Agreement and to transmit such electric
power and energy to the User pursuant to the Transmission Agreement.
The sale of the Receivables provides refinancing for the New Equipment
and financing for the Existing Equipment on terms more favorable to the
Supplier and the Issuer than the terms of the Notes. The Receivables
constitute fair and adequate consideration to the User for the benefits
to be derived by the User under the Transmission Agreement and the
Purchase Price for the Receivables is fair and adequate consideration
to the Supplier for its obligations under the Receivables Purchase
Agreement.
(w) POWER SALES AGREEMENT AND TRANSMISSION AGREEMENT. Exhibit
G attached hereto is a true, complete and correct copy of the Power
Sales Agreement. Exhibit H attached hereto is a true, complete and
correct copy of the Transmission Agreement.
Section 4.4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser makes the following representations and warranties to each of the
other parties hereto:
(a) NOTES FOR INVESTMENT ONLY. The Purchaser represents and
warrants to each of the other parties hereto that it is acquiring the
Notes for its own account for investment and not with a view to, or for
sale in connection with, any distribution, provided that the
disposition of its property shall at all times be and remain within its
control.
(b) THE PURCHASER'S ERISA REPRESENTATIONS. The Purchaser
represents and warrants to each of the other parties hereto that as to
the source of funds to be used by it to purchase the Notes, no part of
such funds constitutes
23
assets allocated to any separate account (as defined in Section 3 of
ERISA) maintained by it.
(c) ENFORCEABILITY. This Agreement is, and the other
Transaction Documents to which the Purchaser is a party, when duly
executed and delivered, will be, legal, valid and binding obligations
of the Purchaser which is a party hereto or thereto, enforceable in
accordance with their terms, except as such enforcement may be limited
by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights (whether in a
proceeding at law or in equity).
Section 4.5. REPRESENTATIONS AND WARRANTIES OF THE INDENTURE
TRUSTEE. The Indenture Trustee makes the following representations and
warranties to each of the other parties hereto:
(a) NO DEFAULT. The Indenture Trustee is not in default in the
performance of any of the covenants and agreements contained herein. No
event known to the Trustee has occurred and is continuing which
constitutes a Default.
(b) ORGANIZATION AND GOOD STANDING. The Indenture Trustee is a
national banking association duly organized, validly existing and in
good standing under the laws of the United States, having all corporate
powers required to carry on its business and enter into and carry out
the transactions contemplated hereby.
(c) AUTHORIZATION. The Indenture Trustee has duly taken all
corporate action necessary to authorize the execution and delivery by
it of the Transaction Documents to which it is a party and to authorize
the consummation of the transactions contemplated thereby and the
performance of its obligations thereunder.
(d) NO CONFLICTS OR CONSENTS. The execution and delivery by
the Indenture Trustee of the Transaction Documents to which it is a
party, the performance by it of its obligations under the Transaction
Documents, and the consummation of the transactions contemplated by the
various Transaction Documents, do not and will not (i) conflict with
any provision of (1) any domestic law, statute, rule or regulation
relating to the banking or trust powers of the Trustee, (2) the
articles of association or bylaws of the Indenture Trustee, or (3) any
agreement, judgment, license, order or permit applicable to or binding
upon the Indenture Trustee. Except as expressly contemplated in the
Transaction Documents, no consent, approval, authorization or order of,
and no notice to or filing with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by the Indenture Trustee of any Transaction Document or to
24
consummate any transactions contemplated by the Transaction Documents.
(e) ENFORCEABILITY. This Agreement is, and the other
Transaction Documents to which the Indenture Trustee is a party, when
duly executed and delivered, will be, legal, valid and binding
obligations of the Indenture Trustee which is a party hereto or
thereto, enforceable in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights
(whether in a proceeding at law or in equity).
(f) NO LIENS. The Indenture Trustee represents and warrants
to, and covenants with, each other party hereto that there exist no
Liens on the Project which result from any claim against the Indenture
Trustee, other than claims related to any act or omission of the
Indenture Trustee authorized or taken pursuant to this Agreement or any
other Transaction Document.
ARTICLE V
INDEMNITIES
Section 5.1. INDEMNITY OF THE USER. The User agrees to indemnify the
Purchaser, the Supplier, each Holder of any Note and each Holder of any
Receivable, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including reasonable fees and expenses of
attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs")
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against any Holder of any Note or any Holder of any Receivable
growing out of, resulting from or in any other way associated with any of the
Facility, the Trust Estate, the Transaction Documents and the transactions
and events associated therewith or contemplated therein, including, without
limitation, any liabilities and costs arising out of or relating to any
investigation, litigation or proceeding related to any environment cleanup,
audit, compliance or other matter relating to any applicable environmental
law or the condition of the Facility or any property owned, leased or
operated by any of the Transaction Parties (provided, however, such
indemnification with respect to any property owned, leased, or operated by
any of the Transaction Parties shall be limited with respect to the Supplier
to any property owned, leased, or operated by User, which includes the
Facility); electromagnetic fields or the presence on or under, or the escape,
discharge, emission or release from the Facility or any property owned,
leased or operated by any of the Transaction Parties of any hazardous or
toxic material, waste, substance or constituent (including any liabilities
and costs asserted or arising under any environmental law), regardless of
whether caused by, or
25
within the control of, the Transaction Parties, provided only that neither
the Purchaser, the Supplier nor any such Holder shall be entitled under this
Section to receive indemnification for that portion, if any, of any
liabilities and costs which is proximately caused by its own individual
negligence, gross negligence or willful misconduct. If any Person (including
the User, the Supplier, the Issuer or any of their Affiliates) ever alleges
such negligence, gross negligence or willful misconduct by the Purchaser, the
Supplier, any Holder of any Note or any Holder of any Receivable, the
indemnification provided for in this section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such time as a
court of competent jurisdiction enters a final judgment as to the extent and
effect of the alleged negligence, gross negligence or willful misconduct. As
used in this section the terms "the Purchaser", "the Supplier", "Holder of
any Note" and "Holder of any Receivable" shall refer also to each director,
officer, agent, attorney, employee, representative and Affiliate of such
Person. The indemnities in this Section 5.1 shall survive the termination of
the Transaction Documents.
Section 5.2. INDEMNITY OF THE SUPPLIER. The Supplier agrees to
indemnify the Purchaser, each Holder of any Note and each Holder of any
Receivable, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including reasonable fees and expenses of
attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs")
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against any Holder of any Note or any Holder of any Receivable
growing out of, resulting from or in any other way associated with any of the
Facility, the Trust Estate, the Transaction Documents and the transactions
and events associated therewith or contemplated therein, including, without
limitation, any liabilities and costs arising out of or relating to any
investigation, litigation or proceeding related to any environment cleanup,
audit, compliance or other matter relating to any applicable environmental
law or the condition of the Facility or any property owned, leased or
operated by any of the Transaction Parties; electromagnetic fields or the
presence on or under, or the escape, discharge, emission or release from the
Facility or any property owned, leased or operated by any of the Transaction
Parties of any hazardous or toxic material, waste, substance or constituent
(including any liabilities and costs asserted or arising under any
environmental law), regardless of whether caused by, or within the control
of, the Transaction Parties, provided only that neither the Purchaser nor any
such Holder shall be entitled under this Section to receive indemnification
for that portion, if any, of any liabilities and costs which is proximately
caused by its own individual negligence, gross negligence or willful
misconduct. If any Person (including the User, the Supplier, the Issuer or
any of their Affiliates) ever alleges such negligence, gross negligence or
willful misconduct by the Purchaser, any
26
Holder of any Note or any Holder of any Receivable, the indemnification
provided for in this section shall nonetheless be paid upon demand, subject
to later adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the
alleged negligence, gross negligence or willful misconduct. As used in this
section the terms "the Purchaser", "Holder of any Note" and "Holder of any
Receivable" shall refer also to each director, officer, agent, attorney,
employee, representative and Affiliate of such Person. The indemnities in
this Section 5.2 shall survive the termination of the Transaction Documents.
Section 5.3. INDEMNITY OF THE ISSUER. The Issuer agrees to indemnify
the Purchaser, the Supplier, each Holder of any Note and each Holder of any
Receivable, upon demand, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements (including reasonable fees and expenses of attorneys,
accountants, experts and advisors) of any kind or nature whatsoever (in this
section collectively called "liabilities and costs") which to any extent (in
whole or in part) may be imposed on, incurred by, or asserted against any Holder
of any Note or any Holder of any Receivable growing out of, resulting from or in
any other way associated with any of the Facility, the Trust Estate, the
Transaction Documents and the transactions and events associated therewith or
contemplated therein, including, without limitation, any liabilities and costs
arising out of or relating to any investigation, litigation or proceeding
related to any environment cleanup, audit, compliance or other matter relating
to any applicable environmental law or the condition of the Facility or any
property owned, leased or operated by any of the Transaction Parties (provided,
however, such indemnification with respect to any property owned, leased, or
operated by any of the Transaction Parties shall be limited with respect to the
Supplier to any property owned, leased, or operated by Issuer, which includes
the Facility); electromagnetic fields or the presence on or under, or the
escape, discharge, emission or release from the Facility or any property owned,
leased or operated by any of the Transaction Parties of any hazardous or toxic
material, waste, substance or constituent (including any liabilities and costs
asserted or arising under any environmental law), regardless of whether caused
by, or within the control of, the Transaction Parties, provided only that
neither the Purchaser, the Supplier nor any such Holder shall be entitled under
this Section to receive indemnification for that portion, if any, of any
liabilities and costs which is proximately caused by its own individual
negligence, gross negligence or willful misconduct. If any Person (including the
User, the Supplier, the Issuer or any of their Affiliates) ever alleges such
negligence, gross negligence or willful misconduct by the Purchaser, the
Supplier, any Holder of any Note or any Holder of any Receivable, the
indemnification provided for in this section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such time as a court
of competent jurisdiction enters a final judgment as to the extent
27
and effect of the alleged negligence, gross negligence or willful misconduct.
As used in this section the terms "the Purchaser", "the Supplier", "Holder of
any Note" and "Holder of any Receivable" shall refer also to each director,
officer, agent, attorney, employee, representative and Affiliate of such
Person. The indemnities in this Section 5.3 shall survive the termination of
the Transaction Documents.
Section 5.4. INDEMNITY IN FAVOR OF THE INDENTURE TRUSTEE. Each of
the Transaction Parties, the Purchaser and the Holders agrees to indemnify
the Indenture Trustee, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including reasonable fees and expenses of
attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs")
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against the Indenture Trustee growing out of, resulting from or in
any other way associated with any of the Facility, the Trust Estate, the
Transaction Documents and the transactions and events associated therewith or
contemplated therein, including, without limitation, the costs and expenses
of defending itself against any claim or liability in connection with the
performance of any of its powers or duties hereunder and any liabilities and
costs arising out of or relating to any investigation, litigation or
proceeding related to any environment cleanup, audit, compliance or other
matter relating to any applicable environmental law or the condition of the
Facility or any property owned, leased or operated by any of the Transaction
Parties; electromagnetic fields or the presence on or under, or the escape,
discharge, emission or release from the Facility or any property owned,
leased or operated by any of the Transaction Parties of any hazardous or
toxic material, waste, substance or constituent (including any liabilities
and costs asserted or arising under any environmental law), regardless of
whether caused by, or within the control of, the Transaction Parties. THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANYWAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE INDENTURE TRUSTEE, provided only
that the Indenture Trustee shall not be entitled under this Section to
receive indemnification for that portion, if any, of any liabilities and
costs which is proximately caused by its own individual gross negligence or
willful misconduct. If any Person (including the Transaction Parties, the
Purchaser, the Holders or any of their Affiliates) ever alleges such gross
negligence or willful misconduct by the Indenture Trustee, the
indemnification provided for in this section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such time as a
court of competent jurisdiction enters a final judgment as to the extent and
effect of the alleged gross negligence or willful misconduct. As used in this
section the term "the Indenture Trustee" shall refer also to each director,
officer, agent, attorney, employee, representative and Affiliate of the
Indenture Trustee. The
28
indemnities in this Section 5.4 shall survive the termination of the
Transaction Documents and any resignation, removal or replacement of the
Indenture Trustee.
ARTICLE VI
EXPENSES
Section 6.1. TRANSACTION COSTS. whether or not the transactions
contemplated by this Agreement are consummated, the User will promptly (and
in any event, within 30 days after any invoice or other statement or notice)
pay all reasonable costs and expenses incurred by or on behalf of (a) the
Purchaser (including reasonable attorneys' fees) in connection with, (i) the
negotiation, preparation, execution and delivery of the Transaction
Documents, and any and all consents, waivers or other documents or
instruments relating thereto; provided, however, that attorney's fees for the
foregoing in connection with the Transaction Documents delivered on the
Closing Date (but not thereafter) shall not exceed $160,000, (ii) the filing,
recording, refiling and re-recording of any Transaction Documents and any
other documents or instruments or further assurances required to be filed or
recorded or refiled or re-recorded by the terms of any Transaction Document,
and (iii) the purchase of the Notes and other action reasonably required in
the course of administration hereof, (b) the Holder of any Note (including
attorneys' fees) in connection with the defense or enforcement of the
Transaction Documents or the defense or its exercise of its rights thereunder
and (c) the Holder of any Receivable (including attorneys' fees) in
connection with the defense or enforcement of the Transaction Documents or
the defense or its exercise of its rights thereunder.
Section 6.2. FEES OF THE INDENTURE TRUSTEE. Pursuant to the Trust
Indenture, on and after the Date of Closing, the User will pay all reasonable
fees and expenses of the Indenture Trustee (including the reasonable fees and
expenses of its agents and counsel) in connection with the transactions
contemplated by the Transaction Documents.
ARTICLE VII
COVENANTS
Section 7.1. COVENANTS OF THE USER. To induce each of the other
parties to enter into the Transaction Documents, the User warrants, covenants
and agrees as follows:
(a) FURTHER ASSURANCES; ETC. The User will cause to be promptly and
duly taken, obtained, executed, acknowledged or delivered all such further
acts, conveyances, permits, licenses, documents and assurances as any
Significant Holder of the Notes, any Significant Holder of the Receivables
and/or the Supplier may from time to time reasonably request in order to
carry out more
29
effectively the intent and purposes of any of the Transaction Documents and
the transactions contemplated thereby.
(b) BOOKS, FINANCIAL STATEMENTS AND REPORTS. The User will at all times
maintain complete and accurate (in all material respects) books of account and
records. The User will maintain and will cause its Subsidiaries to maintain a
standard system of accounting and will furnish the following statements and
reports to the Significant Holder(s) of the Notes, the Significant Holder(s) of
the Receivables and the Supplier at the User's expense:
(i) As soon as available, and in any event within 120 days
after the end of each Fiscal Year, (A) complete audited Consolidated
financial statements of the User together with all notes thereto,
prepared in reasonable detail in accordance with GAAP, together with an
opinion, based on an audit using generally accepted auditing standards,
by Bolinger, Segars, Xxxxxxx & Xxxx, or other independent certified
public accountants selected by the User and acceptable to the Required
Holder(s) of the Notes and the Required Holder(s) of the Receivables,
stating that such Consolidated financial statements have been so
prepared and (B) unaudited consolidating balance sheet and statement of
operations of the User together with all notes thereto, in form and
detail acceptable to the Required Holder(s) of the Notes and the
Required Holder(s) of the Receivables. The Consolidated financial
statements shall contain a Consolidated balance sheet as of the end of
such Fiscal Year and a Consolidated statement of operations, of cash
flows, and equities and margins for such Fiscal Year, each setting
forth in comparative form the corresponding figures for the preceding
Fiscal Year.
(ii) As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter, (A) the User's unaudited
consolidating balance sheet and statement of operations in form and
detail acceptable to the Required Holder(s) of the Notes and the
Required Holder(s) of the Receivables and (B) the User's Consolidated
balance sheet as of the end of such Fiscal Quarter and Consolidated
statement of the User's operations and cash flows for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, all in reasonable detail and prepared in accordance with GAAP,
without footnotes, subject to changes resulting from normal or
recurring year-end adjustments. In addition the User will, together
with each such set of financial statements and each set of financial
statements furnished under clause (i) of this Section 7.1(b), furnish a
certificate in the form of Exhibit I-l attached hereto, signed by the
individual who is acting in the capacity of the chief financial officer
of the User, stating that such financial statements fairly present the
financial condition of the User and that he has reviewed the
Transaction Documents, and stating that no Default
30
exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any
such Default.
(iii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by the
User to its members and all registration statements, periodic reports
and other statements and schedules filed by the User with any
securities exchange, the Securities and Exchange Commission or any
similar governmental authority.
(c) OTHER INFORMATION AND INSPECTIONS. The User will furnish any
information which any Significant Holder of the Notes, any Significant Holder
of the Receivables or the Supplier may from time to time reasonably request
concerning any covenant, provision or condition of the Transaction Documents
or any matter in connection with the User's businesses and operations. During
normal business hours, the User will permit representatives of the Supplier
or a majority of the Significant Holder(s) of the Notes and/or a majority of
the Significant Holder(s) of the Receivables, including independent
accountants, agents, attorneys, appraisers and any other persons, upon three
Business Days' notice (or, if a Default has occurred, upon no notice), to
visit and inspect any of the User's property, including its books of account,
other books and records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs thereof, and to
write down and record any information such representatives obtain. The User
shall permit the such representatives to investigate and verify the accuracy
of the information furnished to the Significant Holder(s) of the Notes, the
Significant Holder(s) of the Receivables and the Supplier in connection with
the Transaction Documents and to discuss all such matters with the User's
officers, employees and representatives. Each Significant Holder of the
Notes, each Significant Holder of the Receivables and the Supplier agrees
that, until the occurrence of a Payment Event of Default or an Insolvency
Event of Default, it will take all reasonable steps to keep confidential any
proprietary information given to it by the User, provided, however, that this
restriction shall not apply to information which (i) has at the time in
question entered the public domain other than by reason of breach of this
provision by any Holder of any Note, any Holder of any Receivable or the
Supplier, (ii) is required to be disclosed by law or by any order, rule or
regulation (whether valid or invalid) of any court or governmental agency, or
authority or by the National Association of Insurance Commissioners, (iii) is
disclosed to the Affiliates of any Holder of any Note, any Holder of any
Receivable, the Supplier, auditors, attorneys, or agents of the Significant
Holder(s) of the Notes, the Significant Holder(s) of the Receivables or the
Supplier, so long as the Significant Holder(s) of the Notes, the Significant
Holder(s) of the Receivables and/or the Supplier, as the case may be, request
that such person or persons keep such information confidential in accordance
with the terms of the confidentiality provisions of
31
this Section 7.1(c) or (iv) is furnished to purchasers or prospective
purchasers of participations or other interests in the Notes or the
Receivables; so long as the Significant Holder(s) of the Notes, the
Significant Holder(s) of the Receivables and/or the Supplier, as the case may
be, request that such person or persons keep such information confidential in
accordance with the terms of the confidentiality provisions of this Section
7.1(c).
(d) NOTICE OF MATERIAL EVENTS AND CHANGES. The User will promptly
notify the Significant Holder(s) of the Notes, the Significant Holder(s) of
the Receivables and the Supplier (i) of any material adverse change in the
User's financial condition or the User's Consolidated financial condition,
(ii) of the occurrence of any Default, (iii) of the acceleration of the
maturity of any Debt owed by the User under any indenture, mortgage,
agreement, contract or other instrument to which it is a party or by which it
or any of its properties is bound, if such acceleration or default might have
a material adverse effect upon the User's Consolidated financial condition,
(iv) of any material adverse claim (or any claim of $100,000 or more)
asserted against the User or with respect to the User's properties, (v) of
the occurrence of any Termination Event, and (vi) of the filing of any suit
or proceeding against the User in which an adverse decision could have a
material adverse effect upon the User's financial condition, business or
operations. Upon the occurrence of any of the foregoing, the User will take
all necessary or appropriate steps to remedy promptly any such material
adverse change, Default or default, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all
controversies on account of any of the foregoing. The User will also notify
the Purchaser, Purchaser's counsel set forth in Section 8.1 and the Supplier
in writing at least twenty Business Days prior to the date that the User
changes its name or the location of its chief executive office or principal
place of business or the place where it keeps its books and records
concerning the Trust Estate, furnishing with such notice any necessary
financing statement amendments or requesting the Purchaser and its counsel to
prepare the same.
(e) MAINTENANCE OF PROPERTIES. The User will maintain, preserve and
protect all property having a value in excess of $50,000 used or useful in
the conduct of its business in good condition and in compliance with all
applicable laws, rules and regulations, and will from time to time make all
repairs, renewals and replacements needed to enable the business and
operations carried on in connection therewith to be promptly and
advantageously conducted at all times.
(f) MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. The User will
maintain and preserve its corporate existence and its rights and franchises
in full force and effect and will qualify to do business as a foreign
corporation or partnership in all states or jurisdictions where required by
applicable law, except where the
32
failure so to qualify will not have any material adverse effect on the User.
(g) PAYMENT OF TRADE DEBT, TAXES, ETC. The User will (i) timely file
all required tax returns; (ii) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its income, profits or
property; (iii) within 60 days after the same becomes due pay all Debt owed
by it on ordinary trade terms to vendors, suppliers and other Persons
providing goods and services used by it in the ordinary course of its
business; (iv) pay and discharge when due all other Debt now or hereafter
owed by it; and (v) maintain appropriate accruals and reserves for all of the
foregoing Debt in accordance with GAAP. The User may, however, delay paying
or discharging any such Debt so long as it is in good faith contesting the
validity thereof by appropriate proceedings and has set aside on its books
adequate reserves therefor.
(h) INSURANCE. The User will maintain insurance on the Facility as
required by the Transmission Agreement.
(i) PERFORMANCE ON THE USER'S BEHALF. If the User fails to pay any
taxes, insurance premiums, expenses, attorneys' fees or other amounts it is
required to pay under any Transaction Document, any Significant Holder of the
Notes or any Significant Holder of the Receivables may pay the same. The User
shall immediately reimburse such Significant Holder for any such payments and
each amount paid by any Significant Holder of the Notes or any Significant
Holder of the Receivables shall be due and payable on the date such amount is
paid by such Significant Holder.
(j) COMPLIANCE WITH AGREEMENTS AND LAW. The User will perform all
material obligations it is required to perform under the terms of each
indenture, mortgage, deed of trust, security agreement, lease, franchise,
agreement, contract or other instrument or obligation to which it is a party
or by which it or any of its properties is bound. The User will conduct its
business and affairs in compliance with all laws, regulations, and orders
applicable thereto (including those relating to pollution and other
environmental matters) in all material respects.
(k) EVIDENCE OF COMPLIANCE. The User will furnish to each Significant
Holder of the Notes, each Significant Holder of the Receivables and the Supplier
at the User's expense all evidence which any Significant Holder of the Notes,
any Significant Holder of the Receivables or the Supplier from time to time
reasonably requests as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by the User in the Transaction
Documents, the satisfaction of all conditions contained therein, and all other
matters pertaining thereto.
33
(l) REPORTS OF LIABILITY. The User shall give prompt written notice
to each Significant Holder of the Notes, each Significant Holder of the
Receivables, the Supplier and the Issuer of each accident likely to result in
damages in excess of $100,000 or claims for damages in excess of $100,000,
against the User, the Supplier, the Issuer, the Purchaser, any Holder of any
Note or any Holder of any Receivable with respect to the Project or any part
thereof in excess of applicable insurance coverage and occurring in whole or
in part (whenever asserted) during the term of the Receivables Purchase
Agreement, in any way relating to or arising out of the Transaction Documents
or the Project or any part thereof, promptly upon the User becoming aware of
same, and on request shall furnish to each Significant Holder of the Notes,
each Significant Holder of the Receivables, the Supplier and the Issuer
information in its possession as to the time, place and nature thereof, the
names and addresses of the parties involved, any Persons injured, witnesses
and owners of any property damaged, and such other information as may be
known to it, and shall promptly upon request furnish the Supplier, each
Significant Holder of the Notes and each Significant Holder of the
Receivables with copies of all correspondence, papers, notices and documents
whatsoever received by the User in connection therewith, provided, however,
the User shall not be required to disclose any information which is
confidential or privileged, the disclosure of which would cause the loss of
the attorney-client privilege or the attorney work-product privilege.
(m) LIENS. The User shall keep the Project free of all Liens except
Permitted Liens. The User shall promptly and in no event later than five (5)
Business Days after it shall have obtained knowledge of the attachment of any
Lien other than a Permitted Lien notify the Purchaser, each Significant
Holder of the Notes, each Significant Holder of the Receivables and the
Supplier of the attachment of such Lien and the full particulars thereof,
unless same shall have been removed or discharged by the User.
(n) NO AMENDMENT. The User will not amend, supplement, terminate or
modify any of the Transaction Documents or the Power Sales Agreement without
the prior written consent of the Purchaser, the Required Holder(s) of the
Notes, the Required Holder(s) of the Receivables, the Supplier and the Issuer.
Section 7.2. COVENANTS OF THE SUPPLIER. To induce each of the other
parties to enter into the Transaction Documents, the Supplier warrants,
covenants and agrees as follows:
(a) PAYMENT AND PERFORMANCE. The Supplier will pay all amounts owing
by it under the Transaction Documents in accordance with the terms thereof
and will observe, perform and comply with every covenant, term and condition
applicable to the Supplier expressed or implied in the Transaction Documents.
34
(b) BOOKS, FINANCIAL STATEMENTS AND REPORTS. The Supplier will at
all times maintain complete and accurate (in all material respects) books of
account and records. The Supplier will maintain and will cause its
Subsidiaries to maintain a standard system of accounting and will furnish the
following statements and reports to each Significant Holder of the
Receivables and each Significant Holder of the Notes at the Supplier's
expense:
(i) As soon as available, and in any event within 120 days
after the end of each Fiscal Year, complete audited Consolidated
financial statements of the Supplier together with all notes thereto,
prepared in reasonable detail in accordance with GAAP, together with an
opinion, based on an audit using generally accepted auditing standards,
by KPMG Peat Marwick, Deloitte & Touche, or another nationally
recognized firm of independent certified public accountants selected by
the Supplier, stating that such Consolidated financial statements have
been so prepared. The Consolidated financial statements shall contain a
Consolidated balance sheet as of the end of such Fiscal Year and a
consolidated statement of operations, of cash flows, and stockholders'
equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year.
(ii) As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter, the Supplier's Consolidated
balance sheet as of the end of such Fiscal Quarter and Consolidated
statement of the Supplier's operations and cash flows for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, all in reasonable detail and prepared in accordance
with GAAP, without footnotes, subject to changes resulting from normal
or recurring year-end adjustments. In addition the Supplier will,
together with each such set of financial statements and each set of
financial statements furnished under clause (i) of this Section 7.2(b),
furnish a certificate in the form of Exhibit I-2 signed by the
Treasurer of the Supplier stating that such financial statements fairly
present the financial condition of the Supplier and that he has
reviewed the Transaction Documents and stating that no Default exists
at the end of such Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any such Default.
(iii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by the
Supplier to its stockholders and all registration statements, periodic
reports and other statements and schedules filed by the Supplier with
any securities exchange, the Securities and Exchange Commission or any
similar governmental authority.
35
(c) OTHER INFORMATION AND INSPECTIONS. The Supplier will furnish to
each Significant Holder of the Receivables and each Significant Holder of the
Notes any information which such Significant Holder may from time to time
reasonably request concerning any covenant, provision or condition of the
Transaction Documents or any matter in connection with the Supplier's
businesses and operations. During normal business hours, the Supplier will
permit representatives of a majority of the Significant Holder(s) of the
Receivables and/or a majority of the Significant Holder(s) of the Notes,
including independent accountants, agents, attorneys, appraisers and any
other persons, upon three Business Days' notice (or, if a Default has
occurred, no notice), to visit and inspect any of the Supplier's property,
including its books of account, other books and records, and any facilities
or other business assets, and to make extra copies therefrom and photocopies
and photographs thereof, and to write down and record any information such
representatives obtain. The Supplier shall permit such representatives to
investigate and verify the accuracy of the information furnished to the
Significant Holder(s) of the Receivables and the Significant Holder(s) of the
Notes in connection with the Transaction Documents and to discuss all such
matters with the Supplier's officers, employees and representatives. Each
Significant Holder of the Receivables and each Significant Holder of the
Notes agrees that, until the occurrence of a Payment Event of Default or an
Insolvency Event of Default, it will take all reasonable steps to keep
confidential any proprietary information given to it by the Supplier,
provided, however, that this restriction shall not apply to information which
(i) has at the time in question entered the public domain other than by
reason of breach of this provision by any Holder of any Receivable or any
Holder of any Note, (ii) is required to be disclosed by law or by any order,
rule or regulation (whether valid or invalid) of any court or governmental
agency, or authority or by the National Association of Insurance
Commissioners, (iii) is disclosed to any of Affiliates of any Holder of any
Receivable or any Holder of any Note, auditors, attorneys, or agents of the
Significant Holder(s) of the Receivables or the Significant Holder(s) of the
Notes so long as the Significant Holder(s) of the Receivables or the
Significant Holder(s) of the Notes, as the case may be, requests that such
person or persons keep such information confidential in accordance with the
terms of the confidentiality provisions of this Section 7.2(c) or (iv) is
furnished to purchasers or prospective purchasers of participations or other
interests in the Receivables or the Notes; so long as the Significant
Holder(s) of the Receivables and/or the Significant Holder(s) of the Notes,
as the case may be, requests that such person or persons keep such
information confidential in accordance with the terms of the confidentiality
provisions of this Section 7.2(c).
(d) NOTICE OF MATERIAL EVENTS AND CHANGE OF ADDRESS. The Supplier
will promptly notify the User, the Significant Holder(s) of the Receivables
and the Significant Holder(s) of the Notes (i) of any material adverse change
in the Supplier's financial
36
condition or the Supplier's Consolidated financial condition, (ii) of the
occurrence of any Default, (iii) of the acceleration of the maturity of any
Debt owed by the Supplier or of any default by the Supplier under any
indenture, mortgage, agreement, contract or other instrument to which it is a
party or by which it or any of its properties is bound, if such acceleration
or default might have a material adverse effect upon the Supplier's
consolidated financial condition, (iv) of any material adverse claim (or any
claim of $1,000,000 or more) asserted against the Supplier. or with respect
to the Supplier's properties, (v) of the occurrence of any Termination Event,
and (vi) of the filing of any suit or proceeding against the Supplier in
which an adverse decision could have a material adverse effect upon the
Supplier's financial condition, business or operations. Upon the occurrence
of any ?f the foregoing, the Supplier will take all necessary or appropriate
steps to remedy promptly any such material adverse change, Default or
default, to protect against any such adverse claim, to defend any such suit
or proceeding, and to resolve all controversies on account of any of the
foregoing. The Supplier will also notify the Purchaser and the Purchaser's
counsel set forth in Section 8.1 in writing at least twenty Business Days
prior to the date that the Supplier changes its name or the location of its
chief executive office or principal place of business or the place where it
keeps its books and records concerning the Receivables, furnishing with such
notice any necessary financing statement amendments or requesting the
Purchaser and the Purchaser's counsel to prepare the sane.
(e) MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. The Supplier will
maintain and preserve its corporate existence and its rights and material
franchises in full force and effect and will qualify to do business as a
foreign corporation in all states or jurisdictions where required by
applicable law, except where the failure so to qualify will not have any
material adverse effect on the Supplier.
(f) PAYMENT OF TRADE DEBT, TAXES, ETC. The Supplier will (i) timely
file all required tax returns; (ii) timely pay all taxes, assessments, and
other governmental charges or levies imposed upon it or upon its income,
profits or property; (iii) within 60 days after the same becomes due pay all
Debt owed by it on ordinary trade terms to vendors, suppliers and other
Persons providing goods and services used by it in the ordinary course of its
business; (iv) pay and discharge when due all other Debt now or hereafter
owed by it; and (v) maintain appropriate accruals and reserves for all of the
foregoing Debt in accordance with GAAP. The Supplier may, however, delay
paying or discharging any such Debt so long as it is in good faith contesting
the validity thereof by appropriate proceedings and has set aside on its
books adequate reserves therefor.
(g) PERFORMANCE ON THE SUPPLIER'S BEHALF. If the Supplier fails to
pay any taxes, insurance premiums, expenses, attorneys' fees or other amounts
it is required to pay under any Transaction Document, any Significant Holder
of the Receivables or any
37
Significant Holder of the Notes may pay the same. The Supplier shall
immediately reimburse such Significant Holder for any such payments and each
amount paid by any Significant Holder shall be due and payable on the date
such amount is paid by such Significant Holder.
(h) COMPLIANCE WITH AGREEMENTS AND LAW. The Supplier will perform
all material obligations it is required to perform under the terms of each
indenture, mortgage, deed of trust, security agreement, lease, franchise,
agreement, contract or other instrument or obligation to which it is a party
or by which it or any of its properties is bound. The Supplier will conduct
its business and affairs in compliance with all laws, regulations, and orders
applicable thereto (including those relating to pollution and other
environmental matters) in all material respects.
(i) EVIDENCE OF COMPLIANCE. The Supplier will furnish to each
Significant Holder of the Receivables, each Significant Holder of the Notes
at the Supplier's expense all evidence which any Significant Holder of the
Receivables, any Significant Holder of the Note and/or the User from time to
time reasonably requests as to the accuracy and validity of or compliance
with all representations, warranties and covenants made by the Supplier in
the Transaction Documents, the satisfaction of all conditions contained
therein, and all other matters pertaining thereto.
(j) NATURE AND ACCOUNTING OF RECEIVABLES AND RELATED RIGHTS.
(i) Prior to the termination of the Transaction Documents, the
Supplier shall not sell, assign or otherwise transfer any of the
Related Rights, except as provided herein. Immediately prior to the
delivery of each Receivable, the Supplier will be the sole owner and
Holder of such Receivable and the Related Rights. Upon the Receivables
Purchaser's payment of the purchase price for a Receivable, it shall
become the sole owner and Holder of such Receivable and the Related
Rights.
(ii) At the time of the delivery of each Receivable, the
amount of such Receivable shall be due and owing to the Supplier and
shall represent an accurate statement of a bona fide sale, delivery and
acceptance of goods and services by the Supplier to or for the User,
PROVIDED, HOWEVER, that the Supplier shall remain the sole owner and
holder of the Facility and shall not sell, assign or otherwise transfer
ownership of the Facility or any part thereof to the User except as
expressly provided in the Transmission Agreement. The payment of such
Receivable shall not be contingent upon the fulfillment by the Supplier
of any further performance of any nature whatsoever. The Supplier shall
not have and shall not accept any returns and shall grant no allowances
or credits to the User.
38
(iii) There shall not have been and shall be no setoffs,
allowances, discounts, deductions, counterclaIms, or disputes with
respect to any Receivable, either at the time it is accepted by the
Receivables Purchaser for purchase or prior to the date it is to be
paid.
(iv) The Supplier shall reflect on its books the absolute sale
of the Receivables to the Receivables Purchaser.
(k) INFORMATION REQUIRED BY RULE 144A. The Supplier will, upon the
request of any Holder of the Receivables or any Holder of the Notes, provide
such Holder, and any qualified institutional buyer designated by such Holder,
such financial and other information as such Holder may reasonably determine to
be necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Receivables
or the Notes, except at such times as the Supplier is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this
Section 7.2(k), the term "qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act.
(l) FURTHER ASSURANCES; ETC. The Supplier will cause to be promptly
and duly taken, obtained, executed, acknowledged or delivered all such
further acts, conveyances, permits, licenses, documents and assurances as any
Significant Holder of the Notes or any Significant Holder of the Receivables
may from time to time reasonably request in order to carry out more
effectively the intent and purposes of any of the Transaction Documents and
the transactions contemplated thereby. The Supplier further agrees to have
resolutions specifically ratifying the execution and delivery of the
Transaction Documents and the transactions contemplated thereby adopted at
the first meeting of its Board of Directors following the Closing Date.
Section 7.3. COVENANTS OF THE ISSUER. To induce each of the other
parties to enter into the Transaction Documents, the Issuer warrants,
covenants and agrees, until the Issuer's payment in full of the principal of
and interest on all the Notes and the payment in full by the Issuer of all
other amounts due by the Issuer to Supplier, Purchaser, the Indenture
Trustee, or any Holder of any Note under this Transaction Agreement, the Note
Purchase Agreement or any other Transaction Document, as follows:
(a) PAYMENT AND PERFORMANCE. The Issuer will pay all amounts owing
by it due under the Transaction Documents in accordance with the terms
thereof and will observe, perform and comply with every covenant, term and
condition expressed or implied in the Transaction Documents.
(b) BOOKS, FINANCIAL STATEMENTS AND REPORTS. The Issuer will at all
times maintain complete and accurate (in all material respects) books of
account and records. The Issuer will maintain a standard system of accounting
and will furnish the following
39
statements and reports to each Significant Holder of the Notes each
Significant Holder of the Receivables, and the Supplier at the Issuer's
expense:
(i) As soon as available, and in any event within 120 days
after the end of each Fiscal Year, complete audited financial
statements of the Issuer together with all notes thereto, prepared in
reasonable detail in accordance with GAAP, together with an opinion,
based on an audit using generally accepted auditing standards, by
Bolinger, Segars, Xxxxxxx & Xxxx, or other independent certified public
accountants selected by the Issuer and acceptable to the Required
Holder(s) of the Notes and the Required Holder(s) of the Receivables,
stating that such financial statements have been so prepared. The
financial statements shall contain a balance sheet as of the end of
such Fiscal Year and a statement of operations, of cash flows, and
equities and margins for such Fiscal Year, each setting forth in
comparative form the corresponding figures for the preceding Fiscal
Year.
(ii) As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter, the Issuer's unaudited balance
sheet as of the end of such Fiscal Quarter and statement of the
Issuer's operations and cash flows for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter, all in
reasonable detail and prepared in accordance with GAAP, without
footnotes, subject to changes resulting from normal or recurring
year-end adjustments. In addition the Issuer will, together with each
such set of financial statements and each set of financial statements
furnished under clause (i) of this Section 7.3(b), furnish a
certificate in the form of Exhibit I-3 signed by the individual who is
acting in the capacity of the chief financial officer of the Issuer
stating that such financial statements fairly present the financial
condition of the Issuer and that he has reviewed the Transaction
Documents and stating that no Default exists at the end of such Fiscal
Quarter or at the time of such certificate or specifying the nature and
period of existence of any such Default.
(iii) By March 1 and September 1 of each year, a projection of
the Issuer's cash flows for the period from the date such report is due
until the scheduled completion of the Facility and the Issuer's budget
for such period, all in such scope and detail as the Required Holder(s)
of the Notes may reasonably request.
(iv) By June 30 and December 31 of each year, commencing
December 31, 1993 and continuing through and until the completion of
the construction of the Facility, a written report signed by a
Responsible Officer of each of the Issuer and the Contractor (1)
describing the progress to such date on the construction of the
Facility, including
40
without limitation, a discussion of distances covered, important
milestones or installed pieces of New Equipment, whether the
construction and operation of the Facility is ahead of, on or behind
schedule, costs and other expenditures incurred to such date,
comparisons of actual costs to budgeted costs for such construction,
revenues received relating to the Facility and any legal, regulatory or
environmental developments that have materially affected the
construction or operation of the Facility, and (2) containing
projections and estimates regarding future construction and operation
of the Facility, including without limitation, a discussion of future
important milestones, installation of pieces of New Equipment, whether
future construction of the Facility, including its completion, will be
completed on schedule, future costs and other expenditures, comparisons
of projected costs to budgeted costs for such construction, estimated
future revenues to be received pursuant to the Power Sales Agreement
relating to the Facility, and any real or potential legal, regulatory
or environmental developments that may materially affect the future
construction and/or operation of the Facility, and (3) containing all
other information in such scope and detail as the Note Purchaser may
reasonably request.
(v) By January 10, 1995 if requested in writing by the
Required Holders of the Notes during the period from September 1, 1994
through and until December 15, 1994, an Engineering Report (the "First
Optional Report").
(vi) By May 10, 1995 if requested in writing by the Required
Holders of the Notes during the period from January 1, 1995 through and
until April 15, 1995, an Engineering Report (the "Second Optional
Report").
(c) OTHER INFORMATION AND INSPECTIONS. The Issuer will furnish to
each Significant Holder of the Notes, each Significant Holder of the
Receivables and the Supplier any information which such Significant Holder or
the Supplier may from time to time reasonably request concerning any
covenant, provision or condition of the Transaction Documents or any matter
in connection with the Issuer's businesses and operations. During normal
business hours, the Issuer will permit representatives of the Supplier, a
majority of the Significant Holder(s) of the Notes and/or a majority of the
Significant Holder(s) of the Receivables, including independent accountants,
agents, attorneys, appraisers and any other persons, upon three Business
Days' notice (or, if a Default has occurred, upon no notice), to visit and
inspect any of the Issuer's property, including its books of account, other
books and records, and any facilities or other business assets, and to make
extra copies therefrom and photocopies and photographs thereof, and to write
down and record any information such representatives obtain. The Issuer shall
permit such representatives to investigate and verify the accuracy of the
information furnished to the Significant
41
Holder(s) of the Notes, the Significant Holder(s) of the Receivables and the
Supplier in connection with the Transaction Documents and to discuss all such
matters with the Issuer's officers, employees and representatives. The
Supplier, each Significant Holder of the Notes and each Significant Holder of
the Receivables agrees that, until the occurrence of a Payment Event of
Default or an Insolvency Event of Default, it will take all reasonable steps
to keep confidential any proprietary information given to it by the Issuer,
provided, however, that this restriction shall not apply to information which
(i) has at the time in question entered the public domain other than by
reason of breach of this provision by any Holder of any Note, any Holder of
any Receivable or the Supplier, (ii) is required to be disclosed by law or by
any order, rule or regulation (whether valid or invalid) of any court or
governmental agency, or authority or by the National Association of Insurance
Commissioners, (iii) is disclosed to any Affiliates of the Supplier, any
Holder of any Note or any Holder of any Receivable, auditors, attorneys, or
agents of the Supplier, the Significant Holder(s) of the Notes and/or the
Significant Holder(s) of the Receivables, so long as the Supplier, the
Significant Holder(s) of the Notes and/or the Significant Holder(s) of the
Receivables, as the case may be, request(s) that such person or persons keep
such information confidential in accordance with the terms of the
confidentiality provisions of this Section 7.3(c), or (iv) is furnished to
purchasers or prospective purchasers of participations or other interests in
the Notes or the Receivables; so long as the Supplier, the Significant
Holder(s) of the Notes or the Significant Holder(s) of the Receivables, as
the case may be, request(s) that such person or persons keep such information
confidential in accordance with the terms of the confidentiality provisions
of this Section 7.3(c)
(d) NOTICE OF MATERIAL EVENTS AND CHANGE OF ADDRESS. The Issuer will
promptly notify the Significant Holder(s) of the Notes, the Significant
Holder(s) of the Receivables and the Supplier (i) of any material adverse
change in the Issuer's financial condition, (ii) of the occurrence of any
Default, (iii) of the acceleration of the maturity of any Debt owed by the
Issuer or of any default by the Issuer under any indenture, mortgage,
agreement, contract or other instrument to which it is a party or by which it
or any of its properties is bound, if such acceleration or default might have
a material adverse effect upon the Issuer's financial condition, (iv) of any
material adverse claim (or any claim of $50,000 or more) asserted against the
Issuer or with respect to the Issuer's properties, (v) of the occurrence of
any Termination Event, and (vi) of the filing of any suit or proceeding
against the Issuer in which an adverse decision could have a material adverse
effect upon the Issuer's financial condition, business or operations. Upon
the occurrence of any of the foregoing the Issuer will take all necessary or
appropriate steps to remedy promptly any such material adverse change,
Default or default, to protect against any such adverse claim, to defend any
such suit or proceeding, and to resolve all controversies on account of any
of the foregoing. The Issuer
42
will also notify the Supplier, the Purchaser and the Purchaser's counsel set
forth in Section 8.1 in writing at least twenty Business Days prior to the
date that the Issuer changes its name or the location of its chief executive
office or principal place of business or the place where it keeps its books
and records concerning the Facility, furnishing with such notice any
necessary financing statement amendments or requesting the Purchaser and the
Purchaser's counsel to prepare the same.
(e) MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. The Issuer will
maintain and preserve its corporate existence and its rights and franchises
in full force and effect and will qualify to do business as a foreign
corporation in all states or jurisdictions where required by applicable law,
except where the failure so to qualify will not have any material adverse
effect on the Issuer.
(f) PAYMENT OF TRADE DEBT, DUES, ETC. The Issuer will (i) timely
file all required tax returns; (ii) timely pay all taxes, assessments, and
other governmental charges or levies imposed upon it or upon its income,
profits or property; (iii) within 60 days after the same becomes due pay all
Debt owed by it on ordinary trade terms to vendors, suppliers and other
Persons providing goods and services used by it in the ordinary course of its
business; (iv) pay and discharge when due all other Debt now or hereafter
owed by it; and (v) maintain appropriate accruals and reserves for all of the
foregoing Debt in accordance with GAAP. The Issuer may, however, delay paying
or discharging any such Debt so long as it is in good faith contesting the
validity thereof by appropriate proceedings and has set aside on its books
adequate reserves therefor.
(g) PERFORMANCE ON THE ISSUER'S BEHALF. If the Issuer fails to pay
any taxes, insurance premiums, expenses, attorneys' fees or other amounts it
is required to pay under any Transaction Document, the Supplier, any
Significant Holder of the Notes or any Significant Holder of the Receivables
may pay the same. The Issuer shall immediately reimburse the Supplier or such
Significant Holder for any such payments and each amount paid by the Supplier
or any Significant Holder shall be due and payable on the date such amount is
paid by the Supplier or such Significant Holder.
(h) COMPLIANCE WITH AGREEMENTS AND LAW. The Issuer will perform all
material obligations it is required to perform under the terms of each
indenture, mortgage, deed of trust, security agreement, lease, franchise,
agreement, contract or other instrument or obligation to which it is a party
or by which it or any of its properties is bound. The Issuer will conduct its
business and affairs in compliance with all laws, regulations, and orders
applicable thereto (including those relating to pollution and other
environmental matters) in all material respects.
43
(i) EVIDENCE OF COMPLIANCE. The Issuer will furnish to the Supplier,
each Significant Holder of the Notes and each Significant Holder of the
Receivables at the Issuer's expense all evidence which the Supplier, any
Significant Holder of the Notes or any Significant Holder of the Receivables
from time to time reasonably requests as to the accuracy and validity of or
compliance with all representations, warranties and covenants made by the
Issuer in the Transaction Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.
(j) INFORMATION REQUIRED BY RULE 144A. The Issuer will, upon the
request of any Holder of the Notes, provide such Holder, and any qualified
institutional buyer designated by such Holder, such financial and other
information as such Holder may reasonably determine to be necessary in order
to permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Notes, except at such times
as the Issuer is subject to the reporting requirements of section 13 or 15(d)
of the Exchange Act. For the purpose of this Section 7.3(j), the term
"qualified institutional buyer" shall have the meaning specified in Rule 144A
under the Securities Act.
(k) INTEREST. The Issuer hereby promises to pay interest to the Note
Purchaser at the Late Payment Rate on all obligations which the Issuer has in
this Agreement promised to pay and which are not paid when due.
(l) COST OVERRUNS. In the event the costs of purchasing and
constructing the Facility exceed the proceeds of the sale of the Notes
hereunder, the Issuer shall be responsible for and shall pay for all such
cost overruns.
(m) RESTRICTED DEBT. The Issuer will not in any manner owe or be
liable for Restricted Debt except:
(i) the Notes and
(ii) trade payables described in Section 7.3(f) which are not
more than 60 days past due or which are being contested as provided in
Section 7.3(f).
(n) LIMITATION ON LIENS. The Issuer will not create, assume or
permit to exist any Lien upon any of the properties or assets which it now
owns or hereafter acquires, except Permitted Liens. The Issuer will not allow
the filing or continued existence of any financing statement describing as
collateral any assets or property of the Issuer other than financing
statements which describe only Permitted Liens and which name as secured
party or lessor only the holder of such Permitted Lien.
(o) LIMITATION ON MERGERS, ISSUANCES OF SECURITIES. The Issuer will
not merge or consolidate with or into any other business entity.
44
(p) LIMITATION ON SALES OF PROPERTY. The Issuer will not sell,
transfer, lease, exchange, alienate or dispose of any of its material assets
or properties or any material interest therein except as provided in the
Transaction Documents.
(q) LIMITATION ON DIVIDENDS AND REDEMPTIONS. The Issuer will not
declare or pay any dividends on, or make any other distribution in respect
of, any class of its capital stock or other interest in it, or cause or
permit any reduction or retirement of the capital stock of the Issuer.
(r) LIMITATION ON INVESTMENTS AND NEW BUSINESS. The Issuer will not
(i) make any expenditure or commitment or incur any obligation or enter into
or engage in any transaction except in the ordinary course of business or
(ii) engage directly or indirectly in any business or conduct any operations
except in connection with the Facility. Notwithstanding the foregoing, the
Issuer may make investments in (1) open market commercial paper, maturing
within 270 days after acquisition thereof, which has the highest credit
rating of either S&P or Xxxxx'x, (2) marketable obligations, maturing within
12 months after acquisition thereof, issued or unconditionally guaranteed by
the United States of America or an instrumentality or agency thereof and
entitled to the full faith and credit of the United States of America, (3)
demand deposits, and time deposits (including certificates of deposit)
maturing within 12 months from the date of deposit thereof, with a domestic
office of a domestic office of any national or state bank or trust company
organized under the laws of the United States of America or any state therein
and having capital, surplus and undivided profits of at least $100,000,000
and (4) repurchase obligations with a term of not more than 60 days for
underlying securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof having
maturities of not more than 6 months from the date of acquisition thereof.
(s) LIMITATION ON CREDIT EXTENSIONS. Except as allowed under the
final sentence of the immediately preceding Section 7.3(r), the Issuer will
not extend credit, make advances or make loans.
(t) AMENDMENT OF CONTRACTS; ERISA PLANS. The Issuer will not amend
or permit any amendment to any contract or lease which releases, qualifies,
limits, makes contingent or otherwise detrimentally affects the rights and
benefits of the Holders of the Notes or the Supplier under or acquired
pursuant to any Transaction Documents. The Issuer has not and will not
establish any ERISA Plan or incur any obligation to contribute to any
"multi-employer plan" as defined in Section 4001 of ERISA.
(u) FISCAL YEAR. The Issuer will not change its Fiscal Year.
(v) NO SUBSIDIARIES. The Issuer will not create or acquire any
Subsidiary.
45
(w) FURTHER ASSURANCES; etc. The Issuer will cause to be promptly
and duly taken, obtained, executed, acknowledged or delivered all such
further acts, conveyances, permits, licenses, documents and assurances as any
Significant Holder of the Notes or any Significant Holder of the Receivables
may from time to time reasonably request in order to carry out more
effectively the intent and purposes of any of the Transaction Documents and
the transactions contemplated thereby.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. NOTICES. All notices, requests, consents, demands and
other communications required or permitted under any Transaction Document
shall be in writing, unless otherwise specifically provided in such
Transaction Document, and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telecopy or telex, by delivery service
with proof of delivery, or by registered or certified United States mail,
postage prepaid, to the party in question at the following address:
If to the Issuer:
OTP, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
If to the Supplier:
Southwestern Public Service Company
Sixth and Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxx 00000
Attn: Secretary and Treasurer
If to the User:
Cap Rock Electric Cooperative, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
If to the Indenture Trustee:
Texas Commerce Bank National Association
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Vice President, Corporate Trust Department
If to the Purchaser: At the addresses set forth in Schedule 1 to
the Note Purchase Agreement
with copies to:
46
Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Treasurer
and Purchaser's counsel
Xxxxxxxx & Knight, a Professional Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
(unless changed by similar notice in writing given by the particular Person
whose address is to be changed). Any such notice or communication shall be
deemed to have been given (a) in the case of personal delivery or delivery
service, as of the date of first attempted delivery at the address and in the
manner provided herein, (b) in the case of telecopy or telex, upon receipt,
or (c) in the case of registered or certified United States mail, three days
after deposit in the mail.
Section 8.2. JOINT AND SEVERAL LIABILITY; PARTIES IN INTEREST. All
obligations under the Transaction Documents that are incurred by two or more
Transaction Parties shall be their joint and several obligations and
liabilities. All grants, covenants and agreements contained in the
Transaction Documents shall bind and inure to the benefit of the parties
thereto and their respective successors and assigns; provided, however, that
no Person (other than the Purchaser) may assign or transfer any of its rights
or delegate any of its duties or obligations under any Transaction Document
without the prior consent of the Purchaser.
SECTION 8.3. GOVERNING LAW; SUBMISSION TO PROCESS. THIS AGREEMENT AND
EACH OF THE OTHER TRANSACTION DOCUMENTS SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WIThOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN
THE STATE OF TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE
UPON IT OR ANY OF THE RELATED PERSONS IN ANY LEGAL PROCEEDING RELATING TO THE
TRANSACTION DOCUMENTS OR THE OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR
FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO ANY OF
THE TRANSACTION DOCUMENTS SHALL BE BROUGHT AND LITIGATED EXCLUSIVELY IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS
DIVISION, TO THE EXTENT IT HAS SUBJECT MATTER JURISDICTION, AND OTHERWISE IN THE
FEDERAL DISTRICT COURTS SITTING IN DALLAS COUNTY, TEXAS. THE PARTIES HERETO
HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE THEREOF IS IMPROPER. IN FURTHERANCE THEREOF, EACH OF THE PARTIES
HERETO HEREBY ACKNOWLEDGE AND AGREE THAT IT WAS NOT INCONVENIENT FOR THEM TO
NEGOTIATE AND FUND THE TRANSACTIONS CONTEMPLATED BY THIS
47
AGREEMENT IN SUCH COUNTY AND THAT IT WILL BE NEITHER INCONVENIENT NOR UNFAIR
TO LITIGATE OR OTHERWISE RESOLVE ANY DISPUTES OR CLAIMS IN A COURT SITTING IN
SUCH COUNTY.
Section 8.4. AMENDMENT. The terms of this Agreement or any other
Transaction Document shall not be altered, modified, amended, supplemented or
terminated in any manner whatsoever except by written instrument signed by
the party against which such alteration, modification, amendment, supplement
or termination is sought and by the Purchaser, the Required Holder(s) of the
Notes and the Required Holder(s) of the Receivables.
Section 8.5. HEADINGS. Section headings and the table of contents
contained in this Agreement and any other Transaction Document are for
convenience only and shall not be construed as a part of such Transaction
Document.
Section 8.6. COUNTERPARTS. This Agreement and each other Transaction
Document may be executed by the parties hereto and thereto in separate
counterparts, each of which when so executed and delivered shall be an
original for all purposes, but all such counterparts shall together
constitute but one and the same instrument.
Section 8.7. SEVERABILITY. If any term or provision hereof or in any
other Transaction Document or the application thereof to any circumstance
shall, in any jurisdiction and to any extent, be invalid or unenforceable,
such term or such provision shall be ineffective as to such jurisdiction to
the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable any remaining terms and provisions hereof or thereof
or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable. To the extent
permitted by Applicable Laws, the parties hereto waive any provision of law
that renders any term or provision hereof or thereof invalid or unenforceable
in any respect.
Section 8.8. REPRODUCTION OF DOCUMENTS. This Agreement, each other
Transaction Document and all other documents relating hereto and thereto,
including without limitation, (a) consents, waivers and modifications that
may hereafter be executed, (b) documents received by the Purchaser, the
Supplier, any Holder of any Note, any Holder of any Receivable (except the
Notes and the Receivables), and (c) financial statements, certificates and
other information previously or hereafter furnished to the Purchaser, the
Supplier, any Holder of any Note or any Holder of any Receivable, may be
reproduced by the Purchaser, the Supplier, any Holder of any Note or any
Holder of any Receivable by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Person
may destroy any original document so reproduced. Each party hereto stipulates
that, to the extent permitted by law, any such reproduction shall be
admissible in evidence as the original
48
itself in any judicial or administrative proceeding (whether or not the
original shall be in existence and whether or not such reproduction was made
by the Purchaser, the Supplier or such Holder in the regular course of
business), and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Section 8.9. PERSONAL PROPERTY. All the parties hereto agree that
the Facility is and shall, from and after the date of this Agreement, be and
remain personal property and that the Facility may be removed by the owner
thereof, at the time in question, from the Site, subject, however, to the
provisions of the Receivables Purchase Agreement and the Trust Indenture.
Section 8.10. SURVIVAL OF AGREEMENTS. The representations,
warranties and agreements of the parties provided for in the Transaction
Documents, and the parties' obligations under any and all thereof, shall
survive the execution and delivery of this Agreement, any disposition of any
Note or any interest of the Issuer or the Supplier in the Facility and the
expiration or other termination of any of the Transaction Documents and shall
be and continue in effect notwithstanding any investigation made by the
Purchaser, the Supplier, any Holder of any Note or any Holder of any
Receivable, and the fact that the Indenture Trustee, the Purchaser, the
Supplier, any Holder of any Note or any Holder of any Receivable may waive
compliance with any of the other terms, provisions or conditions of any of
the Transaction Documents.
Section 8.11. LIABILITIES OF THE PURCHASER, THE HOLDERS OF THE NOTES
AND THE HOLDERS OF THE RECEIVABLES. No party hereto shall have any obligation
or duty to any other party hereto with respect to the transactions
contemplated hereby except those obligations or duties expressly set forth in
the Transaction Documents. Without limiting the generality of the foregoing,
under no circumstances whatsoever shall the Purchaser, any Holder of any Note
or any Holder of any Receivable, as such, be liable to any other party hereto
for any action or inaction on the part of the Indenture Trustee, the Issuer,
the Supplier, the User or any other Person in connection with any of the
Transaction Documents, the holding of any interest in the Facility, the
administration of the Receivables Purchase Agreement, Trust Estate or
otherwise, unless such action or inaction shall be upon the instructions of
the Purchaser, the Required Holder(s) of the Notes, the Required Holder(s) of
the Receivables and consistent with the provisions of the Transaction
Documents.
Section 8.12. NO PARTNERSHIP. Nothing contained in this Agreement is
intended, nor shall it be construed, to create a partnership or joint venture
among the parties hereto, or to render the Purchaser, any Holder of any Note
or any Holder of any Receivable liable or responsible for the performance or
payment of the obligations of the Issuer, the Supplier, the User or the
Indenture Trustee.
49
Section 8.13. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH
PARTY HERETO HEREBY (a) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITh THE TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (b) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (c) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (d) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. EACH OF THE
ISSUER, THE SUPPLIER AND THE USER HEREBY REPRESENTS AND ACKNOWLEDGES THAT IT
HAS ASSETS OF $5,000,000 OR MORE ACCORDING TO ITS MOST RECENT FINANCIAL
STATEMENTS PREPARED IN ACCORDANCE WITh GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, THAT IT HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF CREDIT
TRANSACTIONS GENERALLY AND OF THE TRANSACTIONS CONTEMPLATED BY THE
TRANSACTION DOCUMENTS IN PARTICULAR, AND THAT IT IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION WITH RESPECT TO THE PARTIES TO AND THE
TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS; EACH OF THE ISSUER,
THE SUPPLIER AND THE USER HEREBY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE
TRADE PRACTICES --CONSUMER PROTECTION ACT (OTHER THAN SECTION 17.555
THEREOF), AS FROM TIME TO TIME AMENDED.
Section 8.14. MAXIMUM INTEREST PAYABLE. Each of the parties hereto
and the Holders of the Notes and the Holders of the Receivables specifically
intend and agree to limit contractually the amount of interest payable under
the Transaction Documents and all other instruments and agreements related
thereto to the maximum amount of interest lawfully permitted to be charged
under applicable law. Therefore, none of the terms of the Transaction
Documents or any instrument pertaining to or relating thereto shall ever be
construed to create a contract to pay interest at a rate in excess of the
maximum rate permitted to be charged under applicable law, and none of the
Transaction Parties, any guarantor nor any other party liable or to become
liable under the Transaction Documents, any guaranty or under any other
instruments and agreements related thereto shall ever be liable for interest
in excess of the amount determined at such maximum rate, and the provisions
of this Section 8.14 shall control over all other provisions of the
Transaction Documents, any guaranty or any other instrument pertaining to or
relating to the transactions herein and therein contemplated. If any amount
of interest taken or received by the Purchaser, any Holder of the Notes or
any Holder of the
50
Receivables shall be in excess of said maximum amount of interest which,
under applicable law, could lawfully have been collected by the Purchaser or
such Holder incident to such transactions, then such excess shall be deemed
to have been the result of a mathematical error by all parties hereto and
shall be refunded promptly by the Person receiving such amount to the party
paying such amount, or, at the option of the recipient, credited ratably
against the unpaid principal amount of the Note or Notes and/or Receivable or
Receivables held by the Purchaser or such Holder, respectively. All amounts
paid or agreed to be paid in connection with such transactions which would
under applicable law be deemed "interest" shall, to the extent permitted by
such applicable law, be amortized, prorated, allocated and spread throughout
the stated term of the Transaction Documents. "APPLICABLE LAW" as used in
this Section means that law in effect from time to time which permits the
charging and collection of the highest permissible lawful, nonusurious rate
of interest on the transactions herein contemplated including laws of the
State of Texas and of the United States of America, and "MAXIMUM RATE" as
used in this Section means the maximum lawful, nonusurious rates of interest
(if any) which under applicable law may be charged from time to time.
Section 8.15. TERMINATION OF TRANSACTION AGREEMENT AND TRANSACTION
DOCUMENTS. This Transaction Agreement and each of the other Transaction
Documents shall terminate upon the payment in full of (a) the principal,
interest, Yield-Maintenance Amounts and all other amounts due any and all
Holders of the Notes under any and all of the Notes, (b) any and all amounts
due any and all Holders of the Receivables under any and all of the
Receivables, and (c) any and all other indebtedness, obligations and/or other
amounts due or to become due under any of the Transaction Documents by any
Transaction Party to the Purchaser, any Holder of any Note, any Holder of any
Receivable or the Indenture Trustee. Upon such termination, the Purchaser,
the Holders of any Notes, the Holders of any Receivables and the Indenture
Trustee shall at the expense of the Transaction Parties execute and deliver
all necessary instruments to reflect and effect such termination of the
Transaction Documents as may be reasonably requested by the Transaction
Parties. Notwithstanding the foregoing, any waivers or admissions made by any
Transaction Party in favor of the Purchaser, the Holders of the Notes, the
Holders of the Receivables and/or the Indenture Trustee, and any obligations
which any Person may have to indemnify or compensate the Purchaser, the
Holders of the Notes, the Holders of the Receivables and/or the Indenture
Trustee shall survive any termination of this Agreement or any other
Transaction Document. The parties hereto hereby acknowledge that the waiver
of jury trial and punitive damages set forth in Section 8.13 by the Supplier
and the User shall, with respect to any litigation involving (i) the
Transmission Agreement and/or the Power Sales Agreement and (ii) only the
Transaction Parties, terminate upon the termination of this Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
SOUTHWESTERN PUBLIC SERVICE COMPANY
By: /s/ Xxxx Xxxx
---------------------------------
Xxxx Xxxx
President
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
Secretary and Treasurer
CAP ROCK ELECTRIC COOPERATIVE
By: /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
President
OTP, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
President
METROPOLITAN LIFE INSURANCE COMPANY
By:
---------------------------------
Xxxx X. Xxxxxx
Assistant Vice President
METROPOLITAN INSURANCE AND ANNUITY
COMPANY, as a Purchaser
By: /s/ Xxxxxx X. Hoi
---------------------------------
Name: Xxxxxx X. Hoi
Title: Assistant General Counsel
METROPOLITAN INSURANCE AND ANNUITY
COMPANY, as a Purchaser
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice-President
52
METROPOLITAN PROPERTY AND CASUALTY
INSURANCE COMPANY, as a Purchaser
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice-President
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as the Indenture Trustee
By:
---------------------------------
Xxxxxx Xxxxxxxxx
Vice President and Trust Officer
53
METROPOLITAN INSURANCE AND ANNUITY COMPANY
By:
---------------------------------
Name:
Title:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Vice President and Trust Officer
53
