EXHIBIT 4.25
EXECUTION COPY
AMENDED AND RESTATED
INSTALLMENT SALE AGREEMENT
(Amending and Restating the Amended and Restated Installment Sale Agreement
dated as of November 1, 1994)
between
CITY OF FARMINGTON, NEW MEXICO
Vendor
and
EL PASO ELECTRIC COMPANY
Vendee
Dated as of August 1, 2002
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Four Corners Generating Station, Units 4 and 5
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TO THE EXTENT, IF ANY, THAT THIS INSTALLMENT SALE AGREEMENT CONSTITUTES CHATTEL
PAPER OR AN INSTRUMENT (AS SUCH TERMS ARE DEFINED IN THE UNIFORM COMMERCIAL CODE
AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS
INSTALLMENT SALE AGREEMENT MAY BE CREATED BY THE TRANSFER OR POSSESSION OF ANY
COUNTERPART HEREOF OTHER THAN THE COUNTERPART CONTAINING THE PRINTED RECEIPT
THEREFOR EXECUTED BY JPMORGAN CHASE BANK, AS TRUSTEE, ON OR IMMEDIATELY
FOLLOWING THE SIGNATURE PAGE HEREOF OR THEREOF.
INDEX
(This Index is not a part of the Agreement
but rather is for convenience of reference only.)
Page
----
Preambles .............................................................................................. 1
ARTICLE I. DEFINITIONS .................................................................................... 3
SECTION 1.01. Definitions ............................................................................. 3
SECTION 1.02. Interpretation .......................................................................... 9
SECTION 1.03. Captions and Headings ................................................................... 10
ARTICLE II. REPRESENTATIONS ................................................................................ 10
SECTION 2.01. Representations and Warranties of the City .............................................. 10
SECTION 2.02. Representations and Warranties of the Company ........................................... 10
SECTION 2.03. Confirmation of Findings by City ........................................................ 11
ARTICLE III. CONSTRUCTION OF THE FACILITIES ................................................................. 12
SECTION 3.01. Construction of the Facilities .......................................................... 12
ARTICLE IV. ISSUANCE, SALE AND DISPOSITION OF PROCEEDS OF THE BONDS ........................................ 12
SECTION 4.01. Issuance and Sale of the Bonds .......................................................... 12
SECTION 4.02. Additional Bonds ........................................................................ 12
SECTION 4.03. Disposition of Proceeds of the Bonds .................................................... 12
SECTION 4.04. Requisition Upon and Payments from Construction Fund .................................... 13
SECTION 4.05. Investment of Moneys Held in Funds Under the Ordinance .................................. 14
ARTICLE V. SALE AND PURCHASE OF PROJECT; PAYMENT OF PURCHASE PRICE; CONVEYANCE
OF TITLE; OPERATION AND MAINTENANCE; INSURANCE; INDEMNIFICATION;
CONDEMNATION; TAXES .......................................................................... 14
SECTION 5.01. Sale and Purchase of the Project ........................................................ 14
SECTION 5.02. Amounts and Dates for Payment of Purchase Price of the Project .......................... 14
SECTION 5.03. Payments by Company to be Assigned to the Trustee: Obligation for Payments Absolute ..... 15
SECTION 5.04. Payment of Expenses ..................................................................... 15
SECTION 5.05. City Access to Facilities ............................................................... 15
SECTION 5.06. Maintenance of Facilities ............................................................... 16
SECTION 5.07. Insurance ............................................................................... 16
SECTION 5.08. Indemnification of City; Statements for Services ........................................ 16
SECTION 5.09. Notices of Damage ....................................................................... 19
SECTION 5.10. Condemnation; Disposition of Proceeds ................................................... 19
SECTION 5.11. Condemnation of Company Property ........................................................ 19
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SECTION 5.12. Payments of Taxes and Assessments: No Liens or Charges .................................. 19
SECTION 5.13. Additional Payments by the Company ...................................................... 20
SECTION 5.14. No Abatement of Payments of Purchase Price of the Project ............................... 20
SECTION 5.15. Liens ................................................................................... 20
ARTICLE VI. SPECIAL COVENANTS; CREDIT FACILITY ............................................................ 20
SECTION 6.01. No Warranty as to Suitability of Facilities ............................................. 20
SECTION 6.02. Maintenance of Existence ................................................................ 20
SECTION 6.03. Quiet Enjoyment of the Facilities ....................................................... 21
SECTION 6.04. Cooperation in Applications for Permits and Licenses .................................... 21
SECTION 6.05. Reserved ................................................................................ 21
SECTION 6.06. City's Access to Facilities ............................................................. 21
SECTION 6.07. Tax Covenants ........................................................................... 21
SECTION 6.08. Credit Facility ......................................................................... 22
ARTICLE VII. ASSIGNMENT, LEASING AND SELLING ............................................................... 23
SECTION 7.01. Assignment .............................................................................. 23
SECTION 7.02. Conditions .............................................................................. 23
SECTION 7.03. Instrument Furnished to Trustee ......................................................... 24
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES ................................................................ 24
SECTION 8.01. Events of Default ....................................................................... 24
SECTION 8.02. Force Majeure ........................................................................... 25
SECTION 8.03. Remedies ................................................................................ 25
SECTION 8.04. No Remedy Exclusive ..................................................................... 25
SECTION 8.05. Reimbursement of Attorneys' Fees ........................................................ 26
SECTION 8.06. Waiver of Breach ........................................................................ 26
ARTICLE IX. PREPAYMENT OF PURCHASE PRICE OF THE PROJECT ................................................... 26
SECTION 9.01. Options of Company to Prepay Purchase Price of the Project .............................. 26
SECTION 9.02. Exercise of Option ...................................................................... 26
SECTION 9.03. Mandatory Prepayment of Purchase Price of the Project ................................... 27
SECTION 9.04. Prepayment Upon Certain Transfers ....................................................... 27
ARTICLE X. PURCHASE AND REMARKETING OF BONDS ............................................................. 28
SECTION 10.01. Purchase of Bonds ....................................................................... 28
SECTION 10.02. Optional Purchase of Bonds .............................................................. 28
SECTION 10.03. Determination of Interest Rate Periods .................................................. 28
ARTICLE XI. MISCELLANEOUS ................................................................................. 29
SECTION 11.01. Term of Agreement ....................................................................... 29
SECTION 11.02. Notices ................................................................................. 29
SECTION 11.03. Parties in Interest ..................................................................... 30
SECTION 11.04. Extent of Covenants of the City; No Personal Liability .................................. 30
SECTION 11.05. Confirmation of Request by the Company .................................................. 30
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SECTION 11.06. Amendments .............................................................................. 30
SECTION 11.07. Counterparts ............................................................................ 30
SECTION 11.08. Severability ............................................................................ 30
SECTION 11.09. Governing Law ........................................................................... 30
Exhibit A - DESCRIPTION OF THE FACILITIES
Exhibit B - LIST OF THE COMPANY'S AFFILIATES
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AMENDED AND RESTATED
INSTALLMENT SALE AGREEMENT
THIS AMENDED AND RESTATED INSTALLMENT SALE AGREEMENT, dated as of
August 1, 2002, by and between the CITY OF FARMINGTON, in the County of San
Xxxx, an incorporated municipality, a body politic and corporate, existing under
the Constitution and Laws of the State of New Mexico (hereinafter called the
"City"), as Vendor, and EL PASO ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Texas (hereinafter called the
"Company"), as Vendee, amending and restating the Amended and Restated
Installment Sale Agreement, dated as of November 1, 1994 (hereinafter called the
"1994 Agreement"), between the City, as Vendor, and the Company, as Vendee,
W I T N E S S E T H:
WHEREAS, the City is authorized and empowered under the Pollution
Control Revenue Bond Act, Chapter 397, Laws of 1973 of the State of New Mexico,
31st Legislature, 1st Session, as amended (the "Act") to issue revenue bonds for
and to acquire, whether by construction, purchase, gift or lease, one or more
projects consisting of any land, interest in land, building, structure,
facility, system, fixture, improvement, appurtenance, machinery, equipment or
any combination thereof, or any interest in any one or more of the foregoing,
whether or not presently in existence or under construction, used by an
individual, partnership, firm, company, corporation (including a public
utility), association, trust, estate, political subdivision, state agency or any
legal entity, or its legal representative, agent or assigns, substantially for
the reduction, abatement or prevention of pollution, including, but not limited
to, the removal of pollutants, contaminants or foreign substances from land, air
or water, or for the removal or treatment of any substance in a processed
material which would otherwise cause pollution when such material is used,
provided that any such project shall be located within the State of New Mexico
and within or without or partially within or without the City, but not more than
fifteen miles outside of the corporate limits of the City (or that, if there is
no municipality within fifteen miles of the project, the City is in the county
in which the project is or may be located) and to sell or lease or otherwise
dispose of any or all of such projects upon such terms and conditions as the
governing body of the City (hereinafter called the "City Council") may deem
advisable and as shall not conflict with the provisions of the Act; and
WHEREAS, the Four Corners Generating Station, an electric power
generating plant (hereinafter called the "Plant") is located within fifteen
miles of the corporate limits of the City in San Xxxx County, New Mexico but not
within the corporate limits of any municipality, or, if portions of the Plant
are not located within fifteen miles of the corporate limits of the City, there
is no incorporated municipality within fifteen miles of such portions of the
Plant and the City is located in the county in which such portions of the Plant
are located; and
WHEREAS, the City Council has heretofore on October 23, 1973 adopted a
Resolution (the "1973 Resolution") determining to issue, and, subject to certain
conditions, agreeing to issue under the Act revenue bonds to finance the cost to
the Company of certain Facilities (the "Facilities") for the abatement, control,
reduction or prevention of air and water pollution caused by the operation of
Units 4 and 5 at the Plant, and authorizing the Mayor to execute and deliver a
preliminary agreement relating thereto and, subject to certain conditions, to
take such steps and
actions required or necessary in order to issue such revenue bonds, and a
Preliminary Agreement dated as of December 28, 1973 (the "1973 Agreement") in
the form contemplated by the 1973 Resolution was executed and delivered by the
City and the Company; and
WHEREAS, the City Council on April 8, 1980 adopted a resolution
authorizing the Mayor to execute and deliver an amendment to the 1973 Agreement,
and an Amendment to such Agreement dated as of April 8, 1980 in the form
contemplated by said resolution was executed and delivered by the City and the
Company; and
WHEREAS, the City has heretofore issued and sold $35,440,000 aggregate
principal amount of its Pollution Control Revenue Bonds, 1981 Series A (El Paso
Electric Company, Four Corners Project) (the "1981 Bonds") the proceeds of which
were used to defray a portion of the cost to the Company of acquiring,
constructing, reconstructing, improving, maintaining, equipping or furnishing
the Facilities; and
WHEREAS, the City Council has heretofore on November 22, 1983 adopted
Resolutions (the "1983 Resolutions") approving and authorizing the execution and
delivery by the Mayor and the City Clerk of the City, on behalf of the City, of
the 1983 Agreement setting forth the undertaking by the City to issue and sell
the 1983 Bonds (as hereinafter defined); and
WHEREAS, the City has heretofore issued and sold $35,805,000 aggregate
principal amount of its Annual Tender Pollution Control Revenue Refunding Bonds,
1983 Series A (El Paso Electric Company, Four Corners Project) (the "1983
Bonds") the proceeds of which were used to refund the outstanding 1981 Bonds;
and
WHEREAS, the City has heretofore issued and sold $33,300,000 aggregate
principal amount of its Adjustable Tender Pollution Control Revenue Refunding
Bonds, 1994 Series A (El Paso Electric Company, Four Corners Project) (the "1994
Bonds") the proceeds of which were used to refund the outstanding 1983 Bonds;
and
WHEREAS, the Company has advised the City and the Trustee of its
election to exercise its option to prepay the unpaid balance of the purchase
price of the Project (as hereinafter defined) by taking the actions required by
the 1994 Ordinance (as hereinafter defined) to cause to be purchased and
cancelled the entire principal amount of the 1994 Bonds then outstanding,
subject to the Company's right to revoke such election; and
WHEREAS, the City has adopted its Ordinance No. 2002-1134 and
Resolution No. 2002-1046 (together, the "Ordinance"), and proposes to issue
thereunder its Pollution Control Revenue Refunding Bonds, 2002 Series A (El Paso
Electric Company, Four Corners Project) in the aggregate principal amount of
$33,300,000 (the "Bonds"); and
WHEREAS, the JPMorgan Chase Bank, as successor trustee under the 1994
Ordinance and pursuant to instructions from the Company, has called the 1994
Bonds for mandatory tender for purchase pursuant to the 1994 Ordinance; and
WHEREAS, the Environmental Improvement Division of the Health and
Environmental Department of the State of New Mexico (the successor to which is
the New Mexico Environment Department), the Agency exercising jurisdiction over
the Facilities, has heretofore certified that
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the pollution control Facilities, as described on Exhibit A hereto, as designed
are in furtherance of the purpose of abating or controlling atmospheric or water
pollutants or contaminants resulting from the generation of electricity by Units
4 and 5 at the Plant;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby and in consideration of the premises herein, DO HEREBY AGREE to amend and
restate the 1994 Agreement as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. As used herein:
"Act" shall mean the Pollution Control Revenue Bond Act, Chapter 397,
Laws of 1973 of the State of New Mexico, 31st Legislature, 1st Session, as
amended by Chapter 312, Laws of 1977 of the State of New Mexico, 33rd
Legislature, 1st Session, and Chapter 181, Laws of 1978 of the State of New
Mexico, 33rd Legislature, 2nd Session, and Chapter 114, Laws of 1983 of the
State of New Mexico, 36th Legislature, 1st Session, and all acts supplemental
thereto or amendatory thereof.
"Administration Expenses" shall mean the reasonable expenses incurred
by the City with respect to this Agreement, the Ordinance and any transaction or
event contemplated by this Agreement or the Ordinance, including, without
limitation, the reasonable fees and disbursements of counsel and out-of-pocket
expenses of the City incurred in connection with the authorization, issuance and
sale of the Bonds and the compensation and reimbursement of reasonable fees,
expenses and advances payable to the Trustee, the Registrar, the Paying Agent,
the Tender Agent, the Bank and the Remarketing Agent under the Ordinance.
"Agreement" shall mean this Amended and Restated Installment Sale
Agreement dated as of August 1, 2002 and any and all modifications, alterations,
amendments and supplements hereto.
"Alternate Credit Support" shall mean any letter of credit, credit
facility, insurance policy, guarantee or other credit support agreement or
security mechanism provided by the Company in accordance with Section 6.08
hereof and any extension thereof.
"Authorized Company Representative" shall mean each person at the time
designated to act on behalf of the Company by written certificate furnished to
the City and the Trustee containing the specimen signature of such person and
signed on behalf of the Company.
"Bank" shall mean the issuer of a Letter of Credit, if any, delivered
in conjunction with the Bonds, and the issuer of any subsequently issued Credit
Facility so long as such other Credit Facility shall be in effect, and in its
capacity as such issuer, its successors in such capacity and their assigns.
"Bond" or "Bonds" shall mean the bonds authorized to be issued under
the Ordinance.
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"Bond Counsel" shall mean any firm of nationally recognized bond
counsel experienced in the financing of pollution control facilities and
acceptable to the City, the Trustee and the Company.
"Bond Fund" shall mean the fund created by Section 5.01 of the
Ordinance.
"City" shall mean the City of Farmington, in the County, an
incorporated municipality, a body politic and corporate, existing under the
Constitution and the Laws of the State of New Mexico, and its successors and
assigns.
"City Council" shall mean the City Council of the City or the board or
body in which general legislative powers of the City may subsequently be vested.
"Claim" shall mean liabilities, obligations, losses, damages, taxes
(other than taxes on income), penalties, claims (including, without limitation,
claims involving liability in tort, whether strict or otherwise), actions,
suits, judgments, costs, interest, expenses and disbursements, whether or not
any of the foregoing shall be founded or unfounded, contingent or otherwise
(including, without limitation, legal fees and expenses and costs of
investigation) of any kind and nature whatsoever without any limitation as to
amount.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference herein to a section of the Code shall be deemed to
include the United States Treasury Regulations adopted under the Code, as the
same may be in effect from time to time, unless the context clearly requires
otherwise.
"Company" shall mean El Paso Electric Company, a corporation formed and
existing under the laws of the State of Texas, its successors and their assigns
and any transferee entity to the extent permitted by Section 6.02 hereof.
"Company Indentures" shall mean (i) that certain Indenture of Mortgage,
dated as of October 1, 1946, between the Company and State Street Bank and Trust
Company, as trustee, as supplemented and modified by the twenty-three indentures
supplemental thereto, (ii) that certain Indenture of Mortgage, dated as of June
1, 1981, from the Company to IBJ Xxxxxxxx Bank & Trust Company, as successor
trustee, as the same has heretofore been supplemented and may be hereafter
supplemented and modified or (iii) any indenture or mortgage made by the Company
in accordance with the Plan to secure substantially the same obligations as are
currently secured by the Company Indentures, and subjecting thereto
substantially the same property, and subject to substantially the same prior
liens and encumbrances, and having substantially similar provisions for the
issuance of additional debt thereunder, as the Company Indentures.
"Completion Date" shall mean the date of completion of acquiring,
constructing, reconstructing, improving, maintaining, equipping or furnishing
the Facilities, as that date shall be certified pursuant to Section 3.06 of the
1994 Agreement.
"Construction Fund" shall mean the fund created by Section 6.01 of the
Ordinance.
"Cost of Construction" in respect of the Facilities shall mean the sum,
so far as it relates to the acquiring, constructing, reconstructing, improving,
maintaining, equipping or furnishing of
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the Facilities, of (a) obligations incurred or assumed by the Company for labor,
materials and other expenses and to contractors, builders and materialmen; (b)
the cost of contract bonds and of insurance of all kinds that may be deemed by
the Company to be desirable or necessary during the course of construction; (c)
the expenses incurred or assumed by the Company for test bearings, surveys,
estimates, plans and specifications and preliminary investigations therefor, and
for supervising construction, as well as for the performance of all other duties
required by or reasonably necessary for proper construction; (d) the costs
incurred by the Company in connection with the Letter of Credit, if any,
including the fee charged by the Bank in connection with the issuance of the
Letter of Credit and the costs associated with any prior Letters of Credit; (e)
Administration Expenses incurred in connection with the issuance of the 1981
Bonds, the 1983 Bonds, the 1994 Bonds and the Bonds; (f) legal, accounting,
financial, advertising, recording and printing expenses and all other expenses
incurred in connection with the issuance of the 1981 Bonds, the 1983 Bonds and
the 1994 Bonds, including the issuance fee charged by the City in accordance
with the City's Ordinance No. 82-769, as amended, and Issuance Expenses with
respect to the Bonds; (g) interest (exclusive of accrued interest paid by the
initial purchasers of the Bonds upon delivery) (1) accruing upon each series of
1981 Bonds, the 1983 Bonds, the 1994 Bonds and the Bonds, to the extent paid
from the proceeds of such series of 1981 Bonds, the 1983 Bonds, the 1994 Bonds
and the Bonds, or income from the investment of such proceeds, from the date of
initial issuance of such series of 1981 Bonds, the 1983 Bonds, the 1994 Bonds
and the Bonds until a date six months after the completion of the project
constituting a part of the Facilities and (2) accruing upon any series of bonds
issued by the City otherwise than under the Ordinance to defray the cost to the
Company of any portion of the Facilities or other pollution control facilities
at the Plant financed under the Act, provided such interest is chargeable to a
capital account or would be so chargeable either with a proper election by the
Company or but for a proper election by the Company to deduct such amounts
pursuant to Section 266 of the Internal Revenue Code of 1954, as amended, and in
any case not subsequent to a date six months after the completion of such
facilities; (h) ad valor property, income or other taxes levied upon the
Facilities during their construction; (i) all other costs that the Company shall
be required to pay, under the terms of any contract or contracts; (j) any sums
required to reimburse the Company for payments made by the Company for any of
the above items, for any other cost incurred by the Company which is properly
chargeable to a capital account with respect to the Facilities or for any other
costs incurred and for work done by the Company which are properly chargeable to
the Facilities; and (k) all costs and expenses relating to transfers of title
between the Company and the City pursuant to this Agreement.
"Counsel" shall mean an attorney at law selected by the Company (who
may be counsel to either or both of the City and the Company) and acceptable to
the Trustee or, if not selected by the Company within a reasonable time
following any request therefor, by the City and acceptable to the Trustee.
"County" shall mean San Xxxx County, New Mexico.
"Credit Facility" shall mean, collectively, a Letter of Credit, if any,
and any extensions thereof, and, upon the issuance and delivery of any Alternate
Credit Support in accordance with Section 6.08 hereof, "Credit Facility" shall
mean such Alternate Credit Support.
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"Environmental Law" shall mean any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health or safety or to the release or threatened
release of any materials into the environment, including, without limitation,
the Clean Air Act, as amended, the Clean Water Act of 1977, as amended, the
comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Hazardous Materials Transportation Act, as amended, the Toxic
Substance Control Act, as amended, and the Resource Conservation and Recovery
Act of 1976, as amended.
"Facilities" shall mean the pollution control systems and facilities
presently existing, under construction and to be constructed at the Plant, which
are described in Exhibit A hereto, as from time to time revised, changed,
amended or modified and related improvements and any substitutions therefor.
"Hazardous Materials" shall mean all materials that are, or become,
subject to any Environmental Law, including, without limitation, materials
listed in 49 I.E. ss.172.101, materials defined as hazardous pursuant to Section
101(14) of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, flammable, explosive or radioactive materials,
hazardous or toxic wastes or substances, petroleum or petroleum distillates,
PCB's or asbestos or urea formaldehyde containing materials.
"Issuance Expenses" shall mean any and all expenses incurred in
connection with the issuance of the Bonds including, but not limited to, any (a)
underwriters' compensation; (b) counsel fees; (c) financing advisor fees; (d)
rating agency fees; (e) trustee fees; (f) paying agent and certifying and
authenticating agent fees; (g) accounting fees; (h) printing costs; (i) costs
incurred in connection with the required public approval process; (j) costs of
engineering and feasibility studies necessary to the issuance of the Bonds (as
opposed to such studies relating to completion of the Project); and (k) the
issuance fee charged by, and expenses and disbursements of, the City.
Notwithstanding anything to the contrary herein, "Issuance Expenses" shall not
include any bond insurance premiums and certain letter of credit fees that would
be treated as interest expenses under the arbitrage restrictions of the Code.
"Letter of Credit" shall mean an irrevocable, direct-pay letter of
credit, if any, issued by the Bank and delivered to the Trustee in accordance
with Section 6.08 hereof and any extension thereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "Moody's"
shall be deemed to refer to any other nationally-recognized securities
rating-agency designated by the Company, with the approval of the Remarketing
Agent and the Bank, by notice to the Trustee, the Tender Agent and the City.
"1981 Bonds" shall mean the City's $35,440,000 aggregate principal
amount of Pollution Control Revenue Bonds, 1981 Series A (El Paso Electric
Company, Four Corners Project).
"1981 Construction Fund" shall mean the fund created in connection with
the 1981 Bonds.
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"1983 Agreement" shall mean the Installment Sale Agreement, dated as of
November 1, 1983, between the City, as Vendor, and the Company, as Vendee.
"1983 Bonds" shall mean the City's $35,805,000 aggregate principal
amount of Annual Tender Pollution Control Revenue Refunding Bonds, 1983 Series A
(El Paso Electric Company, Four Corners Project).
"1983 Construction Fund" shall mean the fund created under the 1983
Agreement.
"1983 Ordinance" shall mean Ordinance No. 83-807, as supplemented by
Resolution 83-403, creating and securing the 1983 Bonds, as modified, altered,
amended, supplemented or confirmed by any and all ordinances or resolutions
supplemental thereto or amendatory thereof adopted pursuant thereto.
"1994 Agreement" shall mean that certain Installment Sale Agreement
dated as of November 1, 1994, between the City and the Company, and setting
forth the undertaking by the City to issue and sell the 1994 Bonds (as
hereinafter defined).
"1994 Bonds" shall mean the City's $33,300,000 aggregate principal
amount of Pollution Control Revenue Refunding Bonds, 1994 Series A (El Paso
Electric Company, Four Corners Project).
"1994 Construction Fund" shall mean the fund created under the 1994
Agreement.
"1994 Ordinance" shall mean Ordinance No. 94-1018, as amended and
supplemented by Ordinances Nos. 96-1035 and 99-965 and Resolution 94-798,
creating and securing the 1994 Bonds.
"Non-Qualifying Costs" in respect of the Facilities shall include any
Cost of Construction that does not constitute a Qualifying Cost.
"Outstanding", when used in reference to the Bonds, shall mean, as at
any particular date, the aggregate of all Bonds authenticated and delivered
under the Ordinance except;
(a) those cancelled at or prior to such date or delivered to or
held by the Trustee at or prior to such date for cancellation;
(b) those deemed to have been paid in accordance with Article IX
of the Ordinance;
(c) those in lieu of, or in exchange, replacement or
substitution for which, other Bonds shall have been authenticated and
delivered pursuant to the Ordinance unless proof satisfactory to the
Trustee and the Company is presented that such Bond is held by a bona
fide holder in due course; and
(d) Undelivered Bonds.
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"Ordinance" shall mean Ordinance No. 2002-1134 adopted by the City on
July 9, 2002, as supplemented by Resolution No. 2002-1046 adopted by the City on
July 23, 2002, creating and securing the Bonds, as modified, altered, amended,
supplemented or confirmed by any and all ordinances or resolutions supplemental
thereto or amendatory thereof adopted pursuant thereto.
"Owner" shall mean the person or entity in whose name any Bond is
registered upon the registration books maintained pursuant to Section 2.04 of
the Ordinance.
"Permitted Encumbrances" shall mean and include (a) liens for taxes,
assessments and other governmental charges not delinquent or which can be paid
without penalty; (b) unfiled, inchoate mechanics' and materialmen's liens for
construction work in progress; (c) workmen's, repairmen's, warehousemen's and
carriers' liens and other similar liens, if any, arising in the ordinary course
of business; (d) all the following, if they do not individually or in the
aggregate materially impair the use of the Facilities or materially detract from
the value thereof to the Company, viz. any easements, restrictions, mineral,
oil, gas and mining rights and reservations, zoning laws and defects in title or
other encumbrances to which the Facilities may be subject because of the
installation thereof at the Plant; (e) any lien for the satisfaction and
discharge of which a sum of money or surety bond deemed adequate by the Trustee
is on deposit with the Trustee; (f) the rights of the City under this Agreement
or any other sale agreement or lease agreement between the City and the Company
relating to the issuance of bonds under the Act; (g) the lien of the Company
Indentures and the permitted encumbrances and other prior liens referred to
therein; (h)(1) the rights and interest of the Navajo Tribe of Indians in the
Plant site (which is located on the Navajo Reservation), the Company's rights
existing by virtue of the Supplemental Lease dated as of July 19, 1966, between
the Navajo Tribe of Indians, as lessor, and the Company and certain other
persons as tenants in common, as lessees; (2) the rights and interest of the
United States of America in the Plant site and the Company's rights existing by
virtue of the rights-of-way and easements granted to the Company and certain
other persons as tenants in common by the Secretary of the Interior of the
United States of America, by Grant dated as of July 1966; (3) any defects in the
title of the Navajo Tribe to the lands leased; and (4) any restrictions on, or
inability of the Company to obtain enforcement or such lease against the Navajo
Tribe; and (i) rights and interests of co-owners of the Plant arising under the
Plant Agreements.
"Plant" shall mean the Four Corners Generating Station, an electric
power generating plant located within fifteen miles of the corporate limits of
the City in the county but not within the corporate limits of any municipality
or, if portions of the Plant are not located within fifteen miles of the
corporate limits of the City, there is no incorporated municipality within
fifteen miles of such portions of the Plant and the City is located in the
county in which such portions of the Plant are located.
"Plant Agreements" shall mean all of the contracts relating to the
ownership, construction and operation of Unit 4 and Unit 5 at the Plant as from
time to time amended and supplemented.
"Project" shall mean the interest in the Facilities sold by the City to
the Company pursuant to this Agreement.
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"Purchase Price of the Project" shall mean that purchase price
determined pursuant to Section 5.02(a) of this Agreement.
"Qualifying Costs" shall mean any Cost of Construction to the extent
that payment thereof from the Construction Fund or the Bond Fund would
constitute within the meaning of Section 103(b)(4) of the Internal Revenue Code
of 1954, as amended, or any successor statute, the use of proceeds of Bonds to
provide Facilities that are air or water pollution control facilities, solid
waste disposal facilities, or other exempt facilities within the meaning of such
Section, or facilities functionally related and subordinate thereto.
"Reimbursement Agreement" shall mean (i) any Reimbursement Agreement,
made by the Company in favor of the Bank, relating to payments for moneys drawn
under the Letter of Credit, if any, and any amendments, modifications and
supplements thereto, and (ii) from and after the issuance of an Alternate Credit
Support, any letter of credit reimbursement agreement or other arrangement
between the Company and the issuer of any Alternate Credit Support, and any
amendments, modifications and supplements thereto.
"Remarketing Agent" shall mean any remarketing agent appointed in
accordance with Section 14.01(i) of the Ordinance.
"S&P" shall mean Standard & Poor's Ratings Group (a Division of
XxXxxx-Xxxx Inc.), a corporation organized and existing under the laws of the
State of New York, its successors and their assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
nationally-recognized securities rating agency designated by the Company, with
the approval of the Remarketing Agent and the Bank, by notice to the Trustee,
the Tender Agent and the City.
"Tender Agent" shall mean any \ tender agent appointed in accordance
with Section 14.01(ii) of the Ordinance.
"Trustee" shall mean JPMorgan Chase Bank, as trustee under the
Ordinance, and its successor or successors in accordance with the Ordinance.
"Corporate Trust Office" of the Trustee shall mean the principal office of the
Trustee in Texas at which at any particular time its corporate trust business
shall be administered, which office at the date of the adoption of the Ordinance
is 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Institutional Trust
Services; except that with respect to the presentation of Bonds for payment or
for registration of transfer, exchange or tender, such term shall mean the
office or agency of the Trustee at 0000 Xxxxx Xxxxxx, 0/xx/ Xxxxx, Xxxxxx, Xxxxx
00000 Attention: Registered Bond Events.
SECTION 1.02. Interpretation. Unless the context indicates otherwise,
words importing the singular number include the plural number, and vice versa:
the terms "hereof", "hereby", "herein", "hereto", "hereunder" and similar terms
refer to this Agreement: and the term "hereafter" means after, and the term
"heretofore" means before, the date of delivery of the Bonds. Words of any
gender include the correlative words of the other genders, unless the sense
indicates otherwise.
9
SECTION 1.03. Captions and Headings. The captions and headings in
this Agreement are solely for convenience of reference and in no way define,
limit or describe the scope or intent of any Articles, Sections, subsections,
paragraphs, subparagraphs or clauses hereof.
(End of Article I)
ARTICLE II.
REPRESENTATIONS
SECTION 2.01. Representations and Warranties of the City. The City
makes the following representations and warranties as the basis for the
undertakings on the part of the Company herein contained:
(a) The City is an incorporated municipality, a body politic and
corporate, existing under the Constitution and laws of the State of
New Mexico;
(b) The City has the power to enter into the transactions
contemplated by this Agreement and the Ordinance and to carry out its
obligations hereunder and thererunder;
(c) The City has the power to enter into this Agreement and by
proper corporate action has duly authorized the execution and delivery
hereof; and
(d) The execution and delivery of this Agreement and the
adoption of the Ordinance and compliance with the provisions hereof
and thereof will not conflict with, or constitute on the part of the
City a breach of or a default under, any existing law, court or
administrative regulation, decree or order to which the City is
subject to any agreement, ordinance, mortgage, lease or other
instrument by which the City is or may be bound.
SECTION 2.02. Representations and Warranties of the Company. The
Company makes the following representations and warranties as the basis for the
undertakings on the part of the City herein contained:
(a) (i) The Company is a corporation duly incorporated under the
laws of the State of Texas and is in good standing under the laws of
the State of Texas, has power to enter into this Agreement and to
perform and observe the agreements and covenants on its part contained
herein, and by proper corporate action has duly authorized the
execution and delivery hereof, (ii) the Company is duly qualified to
hold property and transact business as a foreign corporation and is in
good standing under the laws of the State of New Mexico, (iii) all of
the proceeds of the Bonds will be used to purchase and cancel the 1994
Bonds, (iv) prior to the issuance of the Bonds, the New Mexico Public
Regulation Commission and the Federal Energy Regulatory Commission
will have approved all matters relating to the Company's participation
in the transactions contemplated by this Agreement which require said
approval, and no other consent, approval, authorization or other order
of any regulatory body or administrative agency or other governmental
body is legally required for the Company's participation therein
except such as have been or will have been obtained prior to the
issuance of the Bonds or
10
such, if any, as may be required under state securities or Blue Sky
laws, and (v) the execution and delivery of this Agreement by the
Company do not, and consummation of the transactions contemplated
hereby and fulfillment of the terms hereof will not, result in a breach
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party, or the Restated Articles of
Incorporation or Bylaws of the Company, or any order, rule or
regulation applicable to the Company of any court or of any Federal or
state regulatory body or administrative agency or other governmental
body having jurisdiction over the Company or over any of its
properties, or any statute of any jurisdiction applicable to the
Company other than breaches or defaults that individually or in the
aggregate are not expected to have a material adverse effect on the
Company.
(b) The Facilities meet applicable Federal, state and local
requirements for the control of pollution now in effect and are used
for the reduction, abatement and prevention of pollution;
(c) The Company does not presently expect that the description
of the Facilities contained in Exhibit A hereto will be revised;
(d) The Facilities are located in the County within fifteen
miles of the City, but not within the corporate limits of any
municipality or, if portions of the Facilities are not located within
fifteen miles of the corporate limits of the City, there is no
incorporated municipality within fifteen miles of such portions of the
Facilities;
(e) With respect to the Facilities at the date of this Agreement
it has, with respect to the Facilities on the date of the first
issuance of the Bonds it will have and with respect to each portion or
item of the Facilities acquired, constructed, reconstructed, improved,
maintained, equipped or furnished after the date of this Agreement it
will, when the same is acquired, constructed, reconstructed, improved,
maintained, equipped or furnished and any interest therein is to pass
hereunder to the City, have good and marketable title to such interest
therein, free and clear of all claims, liens and encumbrances other
than Permitted Encumbrances; and
(f) The interest referred to in subsection (e) of this Section
is, and on the date of the first issuance of the Bonds hereunder such
interest will be, (i) a 7% undivided interest with respect to
Facilities serving only Units 4 and 5 at the Plant and (ii) a 5.07%
undivided interest with respect to Facilities serving all five Units at
the Plant.
(g) The Company has no affiliates except those listed on Exhibit
B hereto.
SECTION 2.03. Confirmation of Findings by City. The City hereby
confirms its findings that its financing of the Company's interest in the
Facilities will serve the public purpose of the act to protect and promote the
health, welfare and safety of the citizens of the State of New Mexico and its
habitat and wildlife, with the resultant higher level of employment and economic
activity and stability.
(End of Article II)
11
ARTICLE III.
CONSTRUCTION OF THE FACILITIES
SECTION 3.01. Construction of the Facilities. The Company has
exercised all its rights, powers, elections and options under the Plant
Agreements to cause the acquisition, construction, improvement or equipping of
the Facilities on the site of the Plant. In accordance with the provisions of
Section 3.06 of the 1994 Agreement and Section 5.01(d) of the 1994 Ordinance,
the Company provided the required certification to the City and the Trustee upon
completion of the Facilities.
(End of Article III)
ARTICLE IV.
ISSUANCE, SALE AND DISPOSITION OF PROCEEDS OF THE BONDS
SECTION 4.01. Issuance and Sale of the Bonds. The City agrees with
the Company that it will cooperate with the Company and use its best efforts to
issue, sell and deliver the Bonds.
SECTION 4.02. Additional Bonds. The Ordinance does not provide for
the issuance of any bonds other than the Bonds.
SECTION 4.03. Disposition of Proceeds of the Bonds. The City agrees
that the Construction Fund shall be established with the Trustee in accordance
with Section 6.01 of the Ordinance. No proceeds of the Bonds shall be deposited
in the Construction Fund. The Construction Fund shall be held available for
receipt of moneys, if any, transferred, pursuant to the terms of the Ordinance,
from the 1994 Construction Fund. The Trustee shall apply the moneys in the
Construction Fund solely for the following purposes:
(a) Payment to the Company or persons designated by the Company
of amounts in respect of the Cost of Construction which are payable
from time to time in accordance with the applicable provisions of the
Ordinance and Section 4.04 of this Agreement, subject, however, to
prior disbursement of any amounts then required to be paid in
accordance with subsection (c) of this Section.
(b) After making the payments referred to in subsection (a) of
this Section and upon request of the Company, payment into the Bond
Fund of all amounts (except for amounts retained for any Cost of
Construction not then due and payable or the liability for payment of
which is being disputed by the Company referred to in said
certificate) remaining in the Construction Fund, including any
unliquidated investments made with the use of moneys deposited in the
Construction Fund.
(c) Payment into the Bond Fund in the event the Company elects
under Section 9.01(a) of this Agreement to prepay the unpaid balance
of the purchase price of the
12
Project, such payment into the Bond Fund to be made on the date on
which such prepayment is made.
(d) If the principal of the Bonds shall have become due and
payable pursuant to Section 10.01 of the Ordinance payment into the
Bond Fund of all amounts remaining in the Construction Fund without
further authorization but with advice to the City and to the Company of
such action.
Pending payment of the amounts in the Construction Fund, the
undisbursed portion of the same shall, if the Company so elects, be invested and
reinvested in the manner prescribed in the Ordinance.
The Company agrees that, except for requisitions with respect to
Issuance Expenses, it shall not submit or cause to be submitted to the Trustee
any requisition pursuant to Section 4.04 hereof, and shall have no claim upon
any moneys in the Construction Fund, so long as there shall have occurred and be
subsisting any Event of Default enumerated in subsection (a) or (b) of Section
8.01 of this Agreement. The foregoing sentence shall not prevent the application
of moneys in the Construction Fund for the purposes set forth in subsections
(b), (c), and (d) of this Section.
SECTION 4.04. Requisition Upon and Payments from Construction Fund.
The City has, by the provisions of the Ordinance, authorized and directed the
Trustee to make payments from the Construction Fund in accordance with the
provisions of this Agreement. The Trustee is hereby authorized and directed to
pay the Cost of Construction pursuant to subsection (a) of Section 4.03 hereof
upon receipt of requisitions signed by an Authorized Company Representative,
such requisitions to state with respect to each payment to be made: (1) the
requisition number, (2) the name and address of the person, firm or corporation
to whom payment is due or has been made, (3) the amount paid or to be paid, (4)
that, upon the payment of such requisition and as of the date of such payment,
neither of the alternatives specified in the next paragraph shall result and (5)
that no Event of Default enumerated in subsection (a) or (b) of Section 8.01 of
the Agreement has occurred and is subsisting.
The Company will cause such requisitions to be submitted to the Trustee
as may be necessary to effect payments out of the Construction Fund in
accordance with this Section; provided, however, that the Company will not
submit any requisition which, if paid, would result, as of the date of such
payment, in more than (a) 10% of the total of all moneys paid from the
Construction Fund, the 1981 Construction Fund, the 1983 Construction Fund and
the 1994 Construction Fund, other than amounts paid for expenses incurred in
connection with the issuance of the 1981 Bonds, the 1983 Bonds or the 1994
Bonds, having been used for the payment of Non-Qualifying Costs or (b) more than
two percent (2%) of the proceeds of the Bonds having been used for the payment
of Issuance Expenses.
In paying any requisition under this Section 4.04 the Trustee may rely,
without any duty of investigation, as to the completeness and accuracy of all
statements in such requisition upon the approval of such requisition by an
Authorized Company Representative, and the Company hereby covenants and agrees
to indemnify and save harmless the Trustee from any liability
13
incurred in connection with any requisition so approved by an Authorized Company
Representative.
If requested by the City, a copy of each requisition submitted to the
Trustee for payment under this Section shall be promptly provided by the Trustee
to the City.
The Company represents that on the date of first issue of the Bonds the
Company is materially in compliance with Section 4.04 of the 1994 Agreement and
agrees that from and after such date of first issue all requisitions of moneys
from the Construction Fund shall be the lesser of (1) the amount determined
pursuant to said Section 4.04 of the 1994 Agreement and (2) the amount
determined as though this Section 4.04 governed such requisitions and all past
requisitions.
SECTION 4.05. Investment of Moneys Held in Funds Under the Ordinance.
The Company and the City agree that any moneys held in any fund created by the
Ordinance shall be invested or reinvested only as provided in the Ordinance.
(End of Article IV)
ARTICLE V.
SALE AND PURCHASE OF PROJECT; PAYMENT OF
PURCHASE PRICE; CONVEYANCE OF TITLE; OPERATION AND
MAINTENANCE; INSURANCE; INDEMNIFICATION; CONDEMNATION; TAXES
SECTION 5.01. Sale and Purchase of the Project. Pursuant to Sections
3.07 and 5.01 of the 1994 Agreement, the Facilities were sold by the Company to
the City and then resold by the City to the Company for a purchase price set
forth therein. The parties hereto agree that, notwithstanding anything to the
contrary in the 1994 Agreement, effective as of the date of issuance of the
Bonds, the Purchase Price for the Project shall be defined in Section 5.02
hereof.
SECTION 5.02. Amounts and Dates for Payment of Purchase Price of the
Project. (a) The price to be paid by the Company for the Project shall be an
amount equal to the aggregate principal amount due on the Bonds, whether at
maturity or by reason of redemption, or otherwise, and the interest to be paid
by the Company on its obligation to pay such price shall be an amount equal to
the aggregate of the premium, if any, and interest on the Bonds, such price
together with such interest thereon being for all purposes of this Agreement
referred to as the "Purchase Price of the Project." The Company shall, and
hereby agrees to, pay the Purchase Price of the Project by delivery or causing
delivery of such further installments, in immediately available funds, necessary
on the dates and in the amounts and in the manner in the Ordinance as may be
necessary to enable the City to cause payment to be made to the Trustee of
principal of and premium, if any, and interest on the Bonds, whether at
maturity, upon redemption, or otherwise, provided that any amount credited under
the Ordinance against any cash payment required to be made by the City
thereunder shall be credited against the corresponding cash payment required to
be made by the Company hereunder.
14
(b) The Company shall, and hereby agrees to, pay in addition to the
Purchase Price of the Project an amount equal to the aggregate of all other
payments to be made out of the Bond Fund, payment thereof to be made not later
than the principal or interest payment date next following any such payment out
of the Bond Fund but in any event in time to prevent any failure to pay when due
the principal of, premium, if any, and interest on any of the Bonds.
(c) In the event the Company shall fail to make any of the payments
required in this Section 5.02, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid. Draws by the Trustee under the Credit Facility to pay the
principal of, premium, if any, or interest on the Bonds shall be deemed to
satisfy the Company's obligation to make purchase price payments to the extent
of such draws.
(d) The obligation of the Company to make the payments described in
subsection (a) of this Section may be accelerated or prepaid in accordance with
the provisions of this Agreement, notwithstanding the provisions of this
Section.
SECTION 5.03. Payments by Company to be Assigned to the Trustee:
Obligation for Payments Absolute. It is understood and agreed that all payments
under Section 5.02 of this Agreement are, by the Ordinance, to be pledged by the
City to the Trustee, and that all rights and interest of the City under this
Agreement, except for the City's rights under Sections 5.04, 5.08 and 8.05 of
this Agreement and any rights of the City to receive notices, certificates,
requests, requisitions, directions and other communications hereunder, are to be
pledged and assigned to the Trustee. The Company assents to such pledge and
assignment and agrees that the obligation of the Company to make the payments
under Section 5.02 hereof shall be absolute, irrevocable and unconditional and
shall not be subject to any defense (other than payment) or any right of
set-off, counterclaim or recoupment arising out of any breach under this
Agreement, the Reimbursement Agreement, the Ordinance, the Credit Facility or
otherwise by the City, the Trustee, the Tender Agent, the Remarketing Agent, the
Bank or any other party, or out of any obligation or liability at any time owing
to the Company by the City, the Trustee, the Tender Agent, the Remarketing
Agent, the Bank or any other party. The City directs the Company, and the
Company agrees, to pay to the Trustee at its Corporate Trust Office all payments
pursuant to Section 5.02 of this Agreement.
SECTION 5.04. Payment of Expenses. The Company agrees to pay all
compensation and reasonable fees and expenses of, and to reimburse for the
expenses and advances incurred by each of the Trustee, the Registrar, the
Remarketing Agent, the Paying Agent and the Tender Agent under the Ordinance. So
long as any Bonds are Outstanding, the Company will pay to the City
semiannually, on a date to be agreed upon, or within 30 days of receipt of a
statement therefor submitted to the Company pursuant to Section 5.08 hereof, the
amount of any other Administration Expenses not theretofore provided for which
have accrued and become payable.
SECTION 5.05. City Access to Facilities. The Company agrees that the City
shall have the right, upon appropriate prior notice to the Company, to have
reasonable access to the Facilities during normal business hours for the purpose
of making examinations and inspections of the same.
15
SECTION 5.06. Maintenance of Facilities. So long as any Bonds are
Outstanding, the Company will exercise all of its rights, powers, elections and
options under the Plant Agreements to maintain, preserve and keep the Facilities
or to cause such Facilities to be maintained, preserved and kept in good repair,
working order or condition and from time to time to make or cause to be made all
necessary and proper repairs, replacements and renewals; provided, however, that
the Company will have no obligation to maintain, preserve, keep, repair, replace
or renew any item or portion of such Facilities (a) the maintenance,
preservation, keeping, repair, replacement or renewal of which becomes
uneconomic to the Company because of damage or destruction by a cause not within
the control of the Company, or obsolescence (including economic obsolescence) or
change in governmental standards and regulations, or the termination by the
Company of the operation of the generating facilities to which the portion of
such Facilities is an adjunct, and (b) with respect to which the Company has
furnished to the City and the Trustee a certificate executed by an Authorized
Company Representative that the maintenance, preservation, keeping, repair,
replacement or renewal of such portion of such Facilities is being discontinued
for one of the foregoing reasons, which shall be stated therein.
The Company shall have the privilege at its own expense of remodeling such
Facilities or making substitutions, modifications and improvements to such
Facilities from time to time as it, in its discretion, may deem to be desirable
for its uses and purposes, which remodeling, substitutions, modifications and
improvements shall be included under the terms of this Agreement as part of such
Facilities.
SECTION 5.07. Insurance. So long as any Bonds are Outstanding and the
Company, itself or through its agents, operates the Facilities, the Company
shall maintain or cause to be maintained, through a program of self-insurance or
otherwise, such fire, casualty, public liability and other insurance with
respect to the Facilities owned or leased by the Company as is customarily
carried by electric utility companies with respect to similar facilities.
SECTION 5.08. Indemnification of City; Statements for Services. The
Company agrees, whether or not any of the transactions contemplated hereby shall
be consummated and whether or not this Agreement, the Ordinance, the Credit
Facility or any other document relating to the Bonds shall have expired or been
terminated to release, to assume liability for, and agrees to indemnify and hold
harmless, on an after-tax basis, the City, the Trustee, the Paying Agent and the
Registrar and each of the officers, officials, directors, employees, staff
members, agents, shareholders and partners of each of the Trustee, the Paying
Agent and the Registrar (each an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against, any and all Claims that are imposed on,
incurred by or asserted against any Indemnified Party (whether or not because of
an act or omission by such Indemnified Party and whether or not such Indemnified
Party shall also be indemnified by another person), in whole or in part, as a
result of, caused by, arising out of or in any way relating to:
(a) any injury to or death of any person or damage to property in or
upon the Facilities or growing out of or connected with the use, non-use,
condition or occupancy of the Facilities or any part thereof;
(b) violation of any agreement or condition of this Agreement;
16
(c) violation by the Company of any contract, agreement or
restriction relating to the Facilities;
(d) violation of any law, ordinance or regulation affecting the
Facilities or a part thereof or the ownership, occupancy or use thereof;
(e) any statement or information contained in the Ordinance, this
Agreement, any official statement, any certificate or any other documents
relating to the Bonds and the proceedings relating to their issuance and
sale, furnished by the Company to the City which is misleading, untrue or
incorrect in any material respect or use thereof;
(f) any investigation, litigation, proceeding, cleanup, audit,
violation or other matter, related to, of, or involving the application or
compliance with any Environmental Law, the protection of the environment or
the release by the Company of any Hazardous Material;
(g) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any property
owned or operated by the Company of any Hazardous Material, whether caused
by, or within the control of, the Company; and
(h) the administration of the trust created by the Ordinance, the
exercise of any rights under the Ordinance and the performance of any
remedial measures permitted by the Ordinance,
except for (i) a Claim against an Indemnified Party (other than the City) that
arises by reason of such Indemnified Party's gross negligence or willful
misconduct or, in the case of clause (h) above, negligence or willful misconduct
and (ii) Claims arising out of activities described in Section 56-7-1A or B,
XXXX 0000, to the extent such Sections are applicable; provided, however, if and
to the extent the foregoing agreement to indemnify is unenforceable for any
reason, the Company agrees to make the maximum contribution to the payment and
satisfaction of each of the agreed indemnities that is permissible under
applicable law.
In addition, the Company will indemnify and hold the City, the Trustee, the
Paying Agent, the Registrar, the Trustee's, the Paying Agent's and the
Registrar's officers, directors, employees and agents free and harmless from any
loss, claim, damage, tax, penalty, liability (including but not limited to
liability for any patent infringement), disbursement, cause of action, suit,
demand, judgment, litigation expenses, attorneys' fees and expenses or court
costs arising out of, or in any way relating to (a) any errors or omissions of
any nature whatsoever contained in any legal proceedings or other official
representation or inducement made by the City pertaining to the Bonds, (b) any
fraud or misrepresentations or omissions contained in the proceedings of the
City relating to the issuance of the Bonds or pertaining to the financial
condition of the Company which, if known to a purchaser or holder of the Bonds,
might be considered a material factor in a decision whether or not to buy the
Bonds, and (c) the execution or performance of this Agreement, the issuance or
sale of the Bonds, actions taken under the Ordinance or any other cause
whatsoever pertaining to the Facilities and the approval under the Act, and from
any taxes
17
levied or assessed by reason of the sale of its interests in the Facilities by
the Company to the City and by reason of the sale of the Project by the City to
the Company.
Promptly after receipt by an Indemnified Party under this Section 5.08
of written notice of the existence of a claim in respect of which indemnity
hereunder may be sought or of the commencement of any action against the
Indemnified Party in respect of which indemnity hereunder may be sought, the
Indemnified Party shall notify the Company in writing of the existence of such
Claim or commencement of such action. In case any such action shall be brought
against an Indemnified Party under this Section 5.08, the Indemnified Party
shall notify the Company of the commencement thereof and the Company shall be
entitled to participate in and, to the extent that it may wish, to assume the
defense thereof, with counsel satisfactory to the Indemnified Party; provided,
however, that if the Indemnified Party shall have been advised in an opinion of
counsel to the Indemnified Party that there may be legal defenses available to
it which are adverse to or in conflict with those available to the Company or
other Indemnified Parties, which in the opinion of counsel to the Indemnified
Party, should be handled by separate counsel, the Company shall not have the
right to assume the defense of such action on behalf of the Indemnified Party,
but shall be responsible for the reasonable fees and expenses of the Indemnified
Party in conducting its defense; and provided, further, that if the Company
shall not have assumed the defense of such action, and shall not have employed
counsel therefor satisfactory to the Indemnified Party within a reasonable time
after notice of commencement of such action, such reasonable fees and expenses
incurred by the Indemnified Party in conducting its own defense shall be borne
by the Company.
The Company's responsibility for the reasonable fees and expenses of
any Indemnified Party in conducting its defense as provided in the preceding
paragraph shall commence from the time the Claim is known of by the Company, and
such responsibility shall exist and continue regardless of the merits of the
Claim.
In addition, the Company agrees that if it initiates any action, suit
or other proceeding with respect to any claim, demand or request for relief,
whether judicial or administrative, in which the City, the Trustee, the
Registrar or the Paying Agent is named or joined as a party, the Company will
pay and reimburse to such party the full amount of all reasonable fees and
expenses incurred by such party with respect to such party's defense of or
participation in such action, suit or other proceeding.
The City may submit to the Company periodic statements, not more
frequently than monthly, for the reasonable value of services of any City
employees utilized, and for the full amount of any City expenses incurred by the
City in connection with the performance or attainment by the City of its
obligations and rights under the Ordinance, the Bonds or this Agreement, and the
Company shall make payment to the City of the full amount of each such statement
within 30 days after the Company receives such statement; provided that the
Company within such 30-day period may in writing and in good faith specifically
protest all or any portion of the amounts included in such statement and in such
event the Company shall not be obligated to make payment to the City of the
amount which has been protested in such manner until ten days after such protest
shall have been resolved either by agreement between the City and the Company or
by an appropriate tribunal.
18
Under this Section 5.08, the Company shall also be deemed to release,
indemnify and agree to hold harmless each employee, official or officer of the
City to the same extent as the City.
SECTION 5.09. Notices of Damage. After the occurrence of any material
damage or loss to the Facilities, if any Bonds are then Outstanding, the Company
shall notify the City and the Trustee as to the nature and extent of such damage
or loss and whether it is practicable and desirable to rebuild, repair, or
restore such damage or loss.
SECTION 5.10. Condemnation; Disposition of Proceeds. In the event that
title to or the temporary use of the Facilities, or any part thereof, shall be
taken in condemnation or by the exercise of the power of eminent domain by any
governmental body or by any person, firm or corporation acting under
governmental authority, any proceeds received by the City from any award or
awards in respect of the Facilities or any part thereof made in such
condemnation or eminent domain proceedings, after payment of all expenses
incurred in the collection thereof, shall to the extent of the Company's
interest therein be paid to and for the account of the Company, and the City
hereby assigns to the Company all of its right, title and interest in and to any
claim for and rights with respect to any such condemnation award.
The City shall cooperate fully with the Company in the handling and
conducting of any prospective or pending condemnation proceedings with respect
to the Facilities or any part thereof. In no event will the City voluntarily
settle or consent to the settlement of any prospective or pending condemnation
proceedings with respect to the Facilities or any part thereof without the
written consent of the Company, and the City will, at the request of the
Company, accept a sum in payment therefor at any stage of the condemnation
proceedings which the Company shall certify to the City to be fair. Unless and
until such a request is made by the Company, the City will take or cause to be
taken all actions necessary to obtain the award of fair compensation for the
taking and the collection thereof.
SECTION 5.11. Condemnation of Company Property. The Company shall be
entitled to the entire proceeds of any condemnation award or portion thereof
made for damages to or takings of its own property other than the Facilities.
SECTION 5.12. Payments of Taxes and Assessments: No Liens or Charges.
The Company will: (a) pay, or make provision for payment of, all lawful taxes
and assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, levied or assessed by any Federal,
state or municipal government or political body upon the City with respect to or
upon its interest in the Facilities, upon the Project or upon any part of either
or upon any installment payments hereunder when the same shall become due and
(b) pay or cause to be discharged or make adequate provision to satisfy and
discharge, within sixty (60) days after the same shall accrue, any lien or
charge upon any installment payment hereunder and all lawful claims or demands
for labor, materials, supplies or other charges which, if unpaid, might be or
become a lien upon any installment payment hereunder, except Permitted
Encumbrances; provided with respect to both clause (a) and clause (b) of this
Section 5.12 that the Company may in good faith contest any such tax,
assessment, lien, charge, claim or demand in appropriate legal proceedings if
the Company shall notify the City and the Trustee of its intention so to do at
or prior to the time of initiating such contest, and in such event may permit
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the items so contested to remain unpaid, undischarged and unsatisfied during the
period of such contest and any appeal therefrom, unless the City or the Trustee
shall notify the Company in writing that, in the opinion of Counsel, by
nonpayment of any such items the lien of the Ordinance as to the installment
payments of the Purchase Price of the Project will be materially endangered, in
which event the Company shall promptly pay and cause to be satisfied and
discharged all such unpaid items. The City will cooperate fully with the Company
in any such contest.
SECTION 5.13. Additional Payments by the Company. The Company will
pay, or cause be paid, in addition to the payments provided for in Section
5.02(a) hereof, all of the expenses of operation of the portions of the Project
including, without limitation, the cost of all necessary and proper repairs,
replacements and renewals made pursuant to Section 5.06 hereof and premiums for
insurance pursuant to Section 5.07 hereof.
SECTION 5.14. No Abatement of Payments of Purchase Price of the
Project. It is understood and agreed that the payments under Section 5.02(a)
hereof and other charges payable hereunder shall continue to be payable at the
times and in the amounts herein specified, whether or not the Facilities, or any
portion thereof, shall not have been completed or shall have been destroyed by
fire or other casualty, or title thereto, or the use thereof, shall have been
taken by the exercise of the power of eminent domain, and that there shall be no
abatement of any such payments and other charges by reason thereof, whether or
not the Facilities are used or useful and whether or not any applicable laws,
regulations or standards prevent or prohibit the use of the Plant or the
Facilities or any portion thereof, or for any other reason.
SECTION 5.15. Liens. The Company hereby agrees not to create any
lien upon the Bond Fund or upon the Receipts and Revenues (as defined in the
Ordinance) other than the lien created in the Ordinance. The Company hereby
agrees that it shall not have any interest in the Bond Fund or the moneys or
Investment Securities (as defined in the Ordinance) therein.
(End of Article V)
ARTICLE VI.
SPECIAL COVENANTS; CREDIT FACILITY
SECTION 6.01. No Warranty as to Suitability of Facilities. The City
makes no warranty, either express or implied, with respect to the Facilities as
a whole or with respect to any item or portion of the Facilities. Without
limiting the effect of the preceding sentence, it is expressly agreed that in
connection with the sale and conveyance pursuant to this Agreement (1) the City
makes no warranty that the title conveyed shall be good or that its transfer is
or was rightful or that the goods shall be delivered free from any security
interest or other lien or encumbrance, (2) the City makes NO WARRANTY OF
MERCHANTABILITY, and (3) THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE
DESCRIPTION ON THE FACE HEREOF.
SECTION 6.02. Maintenance of Existence. The Company covenants that
it will maintain its corporate existence, will not dissolve or otherwise dispose
of all or substantially all
20
its assets and will not consolidate with or merge into another corporation;
provided, however, that the Company may consolidate with or merge with or into,
or sell or otherwise transfer all or substantially all of its assets (and may
thereafter dissolve), to another corporation, incorporated under the laws of the
United States, one of the states thereof or the District of Columbia, provided,
in the event the Company is not the surviving, resulting or transferee
corporation, as the case may be, such corporation prior to such merger,
consolidation, sale or transfer assumes, by delivery to the Trustee of an
instrument in writing satisfactory in form and substance to the Trustee, all the
obligations of the Company herein.
If consolidation, merger or sale or other transfer is made as permitted
by this Section, the provisions of this Section shall continue in full force and
effect and no further consolidation, merger or sale or other transfer shall be
made except in compliance with the provisions of this Section. The Company shall
notify the Trustee of its affiliates from time to time and of the filing of a
petition in bankruptcy by or on behalf of any of itself or its affiliates from
time to time.
SECTION 6.03. Quiet Enjoyment of the Facilities. The City covenants
that the Company, upon observing and performing the terms, conditions and
covenants on the Company's part to be observed and performed under this
Agreement, shall peaceably and quietly have, hold and enjoy the Project as
purchaser in possession, free from molestation, hindrance, eviction or
disturbance by the City or by any other person or persons claiming the same by,
through or under the City.
SECTION 6.04. Cooperation in Applications for Permits and Licenses.
In the event it may be necessary for the proper performance of this Agreement on
the part of the City or the Company that any application or applications for any
permit or license to do or to perform certain things be made to any governmental
or other agency by or on behalf of the Company or the City, the Company and the
City each agree, upon the request of either, to execute such application or
applications.
SECTION 6.05. Reserved.
SECTION 6.06. City's Access to Facilities. The Company agrees that
the City shall have the right, upon appropriate prior notice to the Company, to
have reasonable access to the Facilities owned or leased by the Company during
normal business hours for the purpose of making examinations and inspections of
the same; provided, however, that the Company reserves the right to restrict
access to any of its generating facilities in accordance with reasonably adopted
procedures relating to safety and security.
SECTION 6.07. Tax Covenants. The Company covenants that it will not
take any action or fail to take any action reasonably within its control which
would, under the Code, cause the interest payable on the Bonds to be includable
in gross income of the holders thereof for Federal income tax purposes (other
than a "substantial user" of the Facilities or a "related person" as those terms
are used in Section 147(a) of the Code).
The Company covenants that it will pay to the United States of America,
on behalf of the City, at or before the times required by or under Section
148(f) of the Code, the amounts required to cause to be met with respect to the
Bonds the rebate requirement of said Section and
21
such rules and regulations applicable to the Bonds. The Company covenants that
in directing the investment of the gross proceeds of the Bonds it will comply
with the applicable requirements of Section 148 of the Code. The Company
covenants that it will maintain on behalf of the City such records and file such
reports, and file copies thereof with the City and, if requested by the Trustee,
with the Trustee, as may be necessary to be maintained to demonstrate compliance
with this paragraph.
SECTION 6.08. Credit Facility. (a) In order to provide credit support
for the payment of all or a portion of the obligations of the Company under
Section 5.02 or 10.01(a) hereof, or both, the Company may, but shall not be
obligated to, provide a Credit Facility at any time, and from time to time.
Subject to the provisions of subsections (c) and (d) of this Section 6.08, the
Company may at any time, and from time to time, terminate, or cause or allow to
be terminated or to expire any such Credit Facility. The Company hereby
authorizes and directs the Trustee to draw moneys under the Credit Facility, if
any, in accordance with the terms thereof and of the Ordinance.
(b) Any Credit Facility, at the option of the Company, may
provide that drawings may be made thereunder to pay to the Trustee, in
accordance with the terms thereof, (i) an amount equal to (A) the principal of
the Bonds when due upon maturity, redemption or acceleration and (B) the portion
of the purchase price of Bonds purchased pursuant to Section 14.03(ii) of the
Ordinance equal to the principal amount thereof; (ii) an amount equal to a
specified number of days' interest, computed at the Maximum Interest Rate (as
defined in the Ordinance), on the Bonds to pay (A) accrued and unpaid interest
on the Bonds and (B) the portion of the purchase price of Bonds purchased
pursuant to Section 14.03(ii) of the Ordinance equal to the accrued interest
thereon; (iii) any part of the portion of the purchase price of Bonds purchased
pursuant to Section 14.03(ii) of the Ordinance corresponding to redemption
premium on the Bonds; and, (iv) an amount to pay redemption premium, if any, on
the Bonds which may be payable upon the redemption thereof. The Credit Facility
shall be reduced to the extent of any drawings thereunder and reinstated in
accordance with the terms thereof.
The Company may, at its election, provide for one or more extensions of
any Credit Facility in accordance with the terms of the Reimbursement Agreement
in respect thereof.
(c) On or prior to the 35th day preceding the mandatory
purchase date occurring pursuant to Section 4.08(c) of the Ordinance, the
Company shall deliver to the Trustee, the Tender Agent, the Remarketing Agent
and the Bank:
(i) a notice which (A) states the effective date of
expiration or termination of the existing Credit Facility, (B)
describes any substitute Credit Facility which may be provided in lieu
thereof, and (C) directs the Trustee, after taking such actions
thereunder as are required to be taken to provide moneys due under the
Ordinance in respect of the Bonds or the purchase thereof, to surrender
the Credit Facility to expire or to be terminated to the obligor
thereon on the effective date of the substitute Credit Facility to be
provided in lieu of the Credit Facility to expire or to be terminated
or, if no such Credit Facility is to be so provided, on the effective
date of such expiration or termination; and
22
(ii) written evidence from Xxxxx'x, if the Bonds are then
rated by Xxxxx'x, and S&P, if the Bonds are then rated by S&P, of the
action that such rating agency will take with respect to the rating
assigned to the Bonds on such expiration or termination and delivery of
a new Credit Facility, if any.
(d) On or prior to the 35th day preceding the effective date of
expiration or termination of any Credit Facility and the substitution of another
Credit Facility that does not result in a downgrading or withdrawal of any
rating assigned to the Bonds, the Company shall deliver to the Trustee, the
Tender Agent, the Remarketing Agent and the Bank:
(i) a notice which (A) states the effective date of
expiration or termination of the existing Credit Facility, (B)
describes the Credit Facility which is to be provided in lieu thereof,
and (C) directs the Trustee to surrender the Credit Facility to expire
or to be terminated to the obligor thereon on the effective date of the
substitute Credit Facility to be provided in lieu of the Credit
Facility to expire or to be terminated; and
(ii) written evidence from Xxxxx'x, if the Bonds are then
rated by Xxxxx'x, and S&P, if the Bonds are then rated by S&P, that
such expiration or termination and delivery of a new Credit Facility
will not result in a downgrading or withdrawal of the rating assigned
to the Bonds by such rating agency.
(e) In connection with any termination of a Credit Facility
and/or the provision of a new Credit Facility, if any, the Company also shall
furnish to the Trustee a Favorable Opinion of Bond Counsel (as defined in the
Ordinance) and such other opinions of counsel as to such other matters as the
City or the Trustee may request.
(End of Article VI)
ARTICLE VII.
ASSIGNMENT, LEASING AND SELLING
SECTION 7.01. Assignment, Leasing or Selling of the Facilities by
the City. Except as provided in Article V of this Agreement, the City will not
sell, lease, assign, transfer, convey or otherwise dispose of its interest in
the Project or any portion thereof or interest therein or in the revenues
therefrom without the written consent of the Company, nor will it create or
suffer to be created any debt, lien or charge thereon, not consented to by the
Company, except Permitted Encumbrances.
SECTION 7.02. Conditions. The Company may sell, lease or assign its
interest in the Facilities, in whole or in part, other than as described in
Section 6.02 hereof, provided the purchaser, lessee or assignee shall assume the
obligations of the Company hereunder with respect to the operation, maintenance
and insurance of its interest in the Facilities. No such sale, lease or
assumption shall relieve the Company of its liability for the payments specified
in Section 5.02 hereof and for the performance and observance of the other
covenants and agreements on its part herein provided.
23
Notwithstanding any other provisions to the contrary, nothing in this
Article VII shall be deemed to prohibit further sale or lease by the Company of
its interest in the Facilities in connection with any authorized financing
thereof under the Act; provided, however, that no such sale or lease by the
Company of its interest in the Facilities or Plant shall affect the payment
obligations of the Company hereunder.
SECTION 7.03. Instrument Furnished to Trustee. The Company shall,
within 15 days after the delivery thereof, furnish to the City and the Trustee a
true and complete copy of the agreements or other documents effectuating any
such assignment, lease or sale.
(End of Article VII)
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default. Each of the following events shall
be and is referred to in this Agreement as an "Event of Default":
(a) failure by the Company to make when due any installment of
the Purchase Price of the Project or any payment required under Section
10.01(a) hereof, which failure shall have resulted in an "Event of
Default" under clause (i), (ii) or (iii) of Section 10.01(a) of the
Ordinance;
(b) a failure by the Company (i) to pay when due any other
payment required to be made under this Agreement or (ii) to observe and
perform any other covenant, condition or agreement on its part to be
observed or performed, other than as referred to in this Section 8.01,
which failure continues for a period of 30 days after written notice,
specifying such failure and requesting that it be remedied, is given to
the Company by the City or the Trustee, which may give such notice in
its discretion and shall give such notice at the written request of the
holders of not less than a majority in principal amount of the Bonds
then Outstanding (other than Bonds held by, or on behalf of the
Company), unless the City and the Trustee or the City, the Trustee and
the holders of a principal amount of Bonds not less than the principal
amount of Bonds the holders of which requested such notice, as the case
may be, shall agree to an extension of such period prior to its
expiration; or
(c) the dissolution or liquidation of the Company, or the
filing by the Company of a voluntary petition in bankruptcy, or failure
by the Company promptly to forestall or lift any execution, garnishment
or attachment of such consequence as will impair its ability to
continue its business or to make any payments under this Agreement, or
the entry of an order for relief by a court of competent jurisdiction
in any proceeding for its liquidation or reorganization under the
provisions of any bankruptcy act or under any similar act which may be
hereafter enacted, or an assignment by the Company for the benefit of
its creditors, or the entry by the Company into an agreement of
composition with its creditors (the term "dissolution or liquidation of
the Company", as used in this clause, shall not be construed to include
the cessation of the existence of the Company
24
resulting from a dissolution or liquidation of the Company following a
transfer of all or substantially all its assets as an entirety, under
the conditions permitting such actions contained in Section 6.02
hereof); or
(d) the occurrence and continuance of an Event of Default under
the Ordinance.
The City (or the Company, in the case of clause (c)) shall promptly
notify the Trustee and the Bank of the occurrence of any Event of Default under
this Section 8.01.
SECTION 8.02. Force Majeure. The provisions of Section 8.01(b) hereof
are subject to the following limitations: If by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States or of the State of New Mexico or any
department, agency, political subdivision, court or official of any of them, or
any civil or military authority; insurrections; riots; epidemics; landslides;
lightning; earthquakes; volcanoes; fires; hurricanes; tornados; floods;
washouts; droughts; arrests; restraint of government and civil disturbances;
explosions; breakage or accident to machinery; or entire failure of utilities;
or any cause or event not reasonably under the control of the Company, the
Company is unable in whole or in part to carry out any one or more of its
agreements or obligations contained herein other than its obligations under
Sections 5.02, 5.04, 5.08, 5.12, 6.02, 8.05 and 10.01(a) hereof, the Company
shall not be deemed in default by reason of not carrying out said agreement or
agreements or performing said obligation or obligations during the continuance
of such inability. The Company shall use reasonable efforts to remedy the cause
or causes preventing it from carrying out its agreements; provided, that the
settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company shall not be
required to make settlement of strikes, lockouts and other disturbances by
acceding to the demands of the opposing party or parties when such course is, in
the judgment of the Company, unfavorable to the Company.
SECTION 8.03. Remedies. (a) Upon the occurrence and continuance of
any Event of Default described in Section 8.01 hereof, and further upon the
condition that, in accordance with the terms of the Ordinance, the Bonds shall
have been declared to be immediately due and payable pursuant to any provision
of the Ordinance, the unpaid balance of the Purchase Price of the Project shall,
without further action, become and be immediately due and payable.
Any waiver of any "Event of Default" under the Ordinance and a
rescission and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Agreement and a rescission
and annulment of the consequences thereof.
(b) Upon the occurrence and continuance of any Event of
Default, the City may take, or cause to be taken, any action at law or in equity
to collect any payments then due and thereafter to become due, or to enforce
performance and observance of any obligation, agreement or covenant of the
Company hereunder.
(c) Any amounts collected from the Company pursuant to this
Section 8.03 shall be applied in accordance with the Ordinance.
SECTION 8.04. No Remedy Exclusive. No remedy conferred upon or
reserved to the City hereby is intended to be exclusive of any other available
remedy or remedies, but each and
25
every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon any
default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right or power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the City to
exercise any remedy reserved to it in this Article VIII, it shall not be
necessary to give any notice other than such notice as may be herein expressly
required.
SECTION 8.05. Reimbursement of Attorneys' Fees. If the Company shall
default under any of the provisions hereof (i) and the City or the Trustee shall
employ attorneys or incur other reasonable expenses for the collection of
payments due hereunder or for the enforcement of performance or observance of
any obligation or agreement on the part of the Company contained herein, the
Company will on demand therefor reimburse the City or the Trustee, as may be,
for the reasonable fees of such attorneys and such other reasonable expenses so
incurred, to the extent permitted by law, and (ii) the Company shall pay the
Trustee reasonable compensation for extraordinary services, including default
administration.
SECTION 8.06. Waiver of Breach. In the event any obligation created
hereby shall be breached by either of the parties and such breach shall
thereafter be waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. In view of the assignment of certain of the City's rights and
interests hereunder to the Trustee, the City shall have no power to waive any
default hereunder by the Company in respect of such rights and interests without
the consent of the Trustee, and the Trustee may exercise any of the rights of
the City hereunder.
(End of Article VIII)
ARTICLE IX.
PREPAYMENT OF PURCHASE PRICE OF THE PROJECT
SECTION 9.01. Options of Company to Prepay Purchase Price of the
Project. (a) The Company shall have, and is hereby granted, the option to prepay
the unpaid balance of the Purchase Price of the Project in whole or in part by
causing the Bonds to be called for redemption pursuant to Section 4.01 of the
Ordinance in which case all or a portion of the balance of the Purchase Price of
the Project shall become due and payable on the redemption date specified
pursuant to Section 9.02 hereof in an amount sufficient to pay the principal of
any premium, if any, and interest on the Bonds so called for redemption.
(b) The Company shall also have, and is hereby granted, the
option to prepay the unpaid balance of the Purchase Price of the Project in
whole or in part by causing Bonds to be deemed to have been paid pursuant to
Section 9.01 of the Ordinance by depositing with the Trustee moneys or
obligations, or a combination thereof, as required by such Section 9.01 and by
giving the irrevocable instructions required by such Section 9.01.
SECTION 9.02. Exercise of Option. (a) To exercise an option granted
in Section 9.01 hereof, the Company shall give written notice to the Trustee
which shall designate therein the
26
principal amount of the Bonds to be caused to be redeemed, or to be deemed to be
paid in accordance with Section 9.01 of the Ordinance and, in the event a
redemption of Bonds is to be effected, such notice shall be given to the Trustee
not less than five Business Days (as defined in the Ordinance) prior to the day
on which the Trustee shall be required to give notice of any such redemption and
shall specify therein (i) the date or dates of redemption and (ii) the
applicable redemption provision of the Ordinance. The exercise of an option
granted in Section 9.01 hereof shall be revocable by the Company at any time
before the receipt by the Trustee of the portion of the Purchase Price of the
Project to be prepaid.
(b) Upon receipt of a notice furnished pursuant to this Section
9.02, the City shall cooperate fully with the Trustee to permit the Trustee to
take or cause to be taken all actions required of it under the Ordinance to
cause Bonds to be paid or redeemed in accordance with such notice.
(c) In the event the Company exercises its rights to cause the
Bonds to be redeemed or deemed to have been paid as provided in Section 9.01
hereof, it shall give the Trustee directions to draw moneys under the applicable
Credit Facility in accordance with the terms hereof and of the Ordinance in the
amounts so specified by the Company in such direction or order to effect the
redemption of the Bonds entitled to the benefits of the Credit Facility or cause
such Bonds to be deemed to have been paid as provided in Section 9.01 of the
Ordinance.
SECTION 9.03. Mandatory Prepayment of Purchase Price of the Project.
The Company shall prepay the necessary portion of the unpaid balance of the
Purchase Price of the Project on such dates on which the Bonds are required to
be redeemed pursuant to the Ordinance.
SECTION 9.04. Prepayment Upon Certain Transfers. On or after the date
of the transfer of moneys from the Construction Fund to the Bond Fund pursuant
to subsection (iv) of Section 6.01 of the Ordinance, but in all events prior to
the date of any notices of redemption resulting therefrom, the Company shall
deposit into the Bond Fund such amount as shall be necessary so that the
principal amount of Bonds to be so redeemed shall be in Authorized Denominations
(as defined in the Ordinance). The Company shall be deemed to have exercised its
option to prepay a portion of the unpaid purchase price of the Project in an
amount equal to the total amount of moneys so transferred and deposited and to
have specified that a principal amount of Bonds equal thereto shall be redeemed.
The Company shall also, at the time of making the deposit into the Bond Fund
specified above, deposit therein an amount equal to the premium, if any, and
interest which will be due on the principal amount of Bonds to be redeemed.
Thereupon, the Trustee shall promptly take steps under the Ordinance to redeem,
on the first practicable date for which notice of redemption may be timely given
under the Ordinance, an aggregate principal amount of Bonds equal to the amount
of such prepayment. If Bond Counsel shall have rendered their opinion to the
effect specified in subsection (iv) of Section 6.01 of the Ordinance, this
Section 9.04 shall be disregarded to the extent specified in such opinion.
(End of Article IX)
27
ARTICLE X.
PURCHASE AND REMARKETING OF BONDS
SECTION 10.01. Purchase of Bonds. (a) In consideration of the issuance
of the Bonds by the City, but for the benefit of the Owners of the Bonds, the
Company does hereby covenant and agree to cause the necessary arrangements to be
made and to be thereafter continued whereby, from time to time, the Bonds will
be purchased from the owners thereof under the circumstances provided in Section
4.08 of the Ordinance. In furtherance of the foregoing covenant of the Company,
the City, at the direction of the Company, has set forth in Section 4.08 of the
Ordinance the terms and conditions relating to such purchases and has set forth
in Article XIV of the Ordinance the duties and responsibilities of the Tender
Agent with respect to the purchase of Bonds and of the Remarketing Agent with
respect to the remarketing of Bonds. At the direction of the Company, Xxxxxxx
Xxxxx Xxxxxx Inc. has been designated as the initial Remarketing Agent and as
the initial Tender Agent and the Company hereby authorizes and directs the
Tender Agent and the Remarketing Agent to purchase, offer, sell and deliver
Bonds in accordance with the provisions of Section 4.08 and Article XIV of the
Ordinance.
Without limiting the generality of the foregoing covenant of the
Company, and in consideration of the City's having set forth in the Ordinance
the aforesaid provisions of Section 4.08 and Article XIV thereof, the Company
covenants, for the benefit of the Owners of the Bonds, to pay, or cause to be
paid, to the Tender Agent such amounts as shall be necessary to enable the
Tender Agent to pay the purchase price of Bonds, all as more particularly
described in Section 4.08 and Article XIV of the Ordinance.
(b) The City shall have no obligation or responsibility
financial or otherwise, with respect to the purchase or remarketing of Bonds or
the making or continuation of arrangements therefor, except that the City shall
generally cooperate with the Company, the Trustee, the Tender Agent and the
Remarketing Agent as contemplated in Article XIV of the Ordinance.
SECTION 10.02. Optional Purchase of Bonds. Subject to the limitations
of the Ordinance, the Company, at any time and from time to time, may furnish
moneys to the Tender Agent accompanied by a notice directing that such moneys be
applied to the purchase of Bonds to be purchased pursuant to Section 4.08 and
Article XIV of the Ordinance. Bonds so purchased shall be delivered to the
Company in accordance with Section 14.05(i) of the Ordinance.
SECTION 10.03. Determination of Interest Rate Periods. The Company may
determine the duration and type of the Interest Rate Periods and certain other
provisions relating to Interest Rate Periods as, and to the extent, set forth in
Section 2.01 of the Ordinance.
(End of Article X)
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ARTICLE XI.
MISCELLANEOUS
SECTION 11.01. Term of Agreement. This Agreement shall remain in full
force and effect from the date hereof until the right, title and interest of the
Trustee in and to the Trust Estate shall have ceased, terminated or become void
in accordance with Article IX of the Ordinance and until all payments required
under this Agreement shall have been made.
SECTION 11.02. Notices. All notices, certificates, requests or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or telecopied or if mailed, when mailed by registered mail,
postage prepaid, addressed as follows:
If to the City: City of Farmington
City Hall
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: City Treasurer
If to the Company: El Paso Electric Company
000 Xxxxx Xxxxxxx
Xx Xxxx, Xxxxx 00000
Attention: Treasurer
If to the Trustee: JPMorgan Chase Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Institutional Trust Services
If to the Remarketing Agent: Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
If to the Tender Agent: Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
A copy of each notice, certificate, request or other communication given
hereunder to the City, the Company, the Trustee, the Bank, the Tender Agent or
the Remarketing Agent shall also be given to the others. The City, the Company,
the Trustee, the Bank, the Tender Agent and the Remarketing Agent may, by notice
given hereunder, designate further or different addresses to
29
which subsequent notices, certificates, requests or other communications shall
be sent. Such notice shall be given to all others listed above.
SECTION 11.03. Parties in Interest. This Agreement shall inure to
the benefit of and shall be binding upon the City, the Company and their
respective successors and assigns, and no other person, firm or corporation,
other than the Owners, the Trustee, the Registrar or the Paying Agent under the
Ordinance, the Tender Agent, the Remarketing Agent and the Bank, shall have any
right, remedy or claim under or by reason of this Agreement; provided, however,
that the obligations of the Company under Section 5.08 hereof shall inure to the
benefit of the persons specified therein, and such obligations shall be
enforceable by such persons as a third-party beneficiary; and subject to the
limitation that any obligation of the City created by or arising out of this
Agreement shall not be a general debt of the City, but shall be payable solely
out of the revenues derived from this Agreement or the sale of the Bonds or
income earned on invested funds as provided herein and in the Ordinance.
SECTION 11.04. Extent of Covenants of the City; No Personal
Liability. All covenants, obligations and agreements of the City contained in
this Agreement or the Ordinance shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any official, officer,
agent, or employee of the City in other than his official capacity, and neither
the members of the City Council nor any official executing the Bonds shall be
liable personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof or by reason of the covenants,
obligations or agreements of the City contained in this Agreement or in the
Ordinance.
SECTION 11.05. Confirmation of Request by the Company. The Company
hereby confirms that it has requested that the City adopt an ordinance in the
form and to the effect of the Ordinance including, without limitation, all of
the terms and provisions relating to the Bonds, the Trustee, Paying Agent,
Registrar, Remarketing Agent and Tender Agent and designating the parties named
therein as Trustee, Paying Agent, Registrar, Remarketing Agent and Tender Agent.
SECTION 11.06. Amendments. This Agreement may be amended only by
written agreement of the parties hereto with the consent of the Bank or the
provider of any other Credit Facility, for so long as the Credit Facility is in
effect, subject to the limitations set forth herein and in the Ordinance.
SECTION 11.07. Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
an original; but such counterparts shall together constitute but one and the
same Agreement.
SECTION 11.08. Severability. If any clause, provision or section of
this Agreement shall, for any reason, be held illegal or invalid, such
illegality or invalidity shall not affect any other provision of this Agreement,
and this Agreement shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein.
SECTION 11.09. Governing Law. The laws of the State of New Mexico
shall govern the construction of this Agreement.
30
(End of Article XI)
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CITY OF FARMINGTON, as Vendor
(Seal)
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Mayor
Attest:
-----------------------------
City Clerk
EL PASO ELECTRIC COMPANY, as Vendee
By: /s/ Xxxxxxx Xxxx
----------------------------------
Title: Treasurer
STATE OF NEW MEXICO )
: ss.
COUNTY OF SAN XXXX )
On this 29th day of July, before me personally came Xxxxxxx X. Xxxxxxx to
me known, who, being by me duly sworn, did depose and say that he resides at
Farmington, NM; that he is the Mayor of the City of Farmington, New Mexico, an
incorporated municipality of the state of New Mexico, the municipality described
in and which executed the above instrument; that he knows the seal of said
municipality; that the seal affixed to said instrument is such seal; that it was
so affixed by authority of the City Council of said municipality; and that he
signed his name thereto by like authority.
[Notarial Seal Affixed]
/s/ Xxxxxx Xxxxxxx
---------------------------
Notary Public
[Notarial Stamp]
STATE OF TEXAS )
) ss.
COUNTY OF EL PASO )
On this 6th day of August, before me personally came Xxxxxxx Xxxx, who,
being by me duly sworn, did depose and say that she resides El Paso County; that
she is the Treasurer of El Paso Electric Company, a Texas corporation, the
corporation described in and which executed the above instrument; and that she
signed her name to said instrument by authority of the Board of Directors of
such corporation.
[Notarial Seal Affixed] /s/ Xxxx Xxxxxxx
----------------------------
Notary Public
[Notarial Stamp]
EXHIBIT A
DESCRIPTION OF THE FACILITIES
The Facilities consist of various systems, machinery and equipment at
Units 4 and 5 of the Plant and certain common facilities related to all five
Units of the Plant, which may be generally described as follows:
A. Particulate Removal System. The particulate removal system is
designed for the purpose of removing fly ash emissions from flue gas. This
system includes a flue gas draft system, fabric filter baghouses and a fly ash
handling system.
B. Low Volume Waste Water System. The low volume waste water system
is designed to reduce the suspended solids in, and remove the oil from,
contaminated waste water streams, including hydrobin discharges and coal pile
runoff, and to dispose of them through a new treatment pond. The system includes
open trenches intercepting waste discharges, a waste sump, pumping equipment,
the treatment pond, an overflow spillway for discharge of clean water to Lake
Xxxxxx and a pipeline to divert acid wash to the ash ponds.
C. Sulfur Dioxide Removal System. The sulfur dioxide removal system
is designed to remove sulfur dioxide emissions from flue gas. This system to
remove sulfur dioxide from flue gases includes vertical spray tower absorber
modules with mist eliminators, lime slakers and other lime handling facilities,
a thickening and polymer system, a secondary dewatering and sludge stabilization
system, sludge and ash transport facilities and related mixers, tanks, pipes,
pumps, silos, ducts and structures. The system also includes mechanical,
electrical, instrumentation and control systems to permit the operation of the
system in accordance with environmental requirements and a new stack.
D. Sanitary Sewer System. The sanitary sewer system is designed to
upgrade the quality of water discharge from the sanitary sewer system.
EXHIBIT B
LIST OF THE COMPANY'S AFFILIATES
Mirasol Energy Services, Inc.
