EXHIBIT 4.16
This (the "Agreement"), is dated as of _________,
2002, between CHUGACH ELECTRIC ASSOCIATION, INC., an Alaskan electric
cooperative corporation (the "Company"), and X.X. XXXXXX SECURITIES INC.
The Company is issuing $60,000,000 in aggregate principal amount of its
New Bonds, 2002 Series B (the "2002 Series B Bonds") pursuant to the Eleventh
Supplemental Indenture, dated as of __________, 2002 (the "Eleventh Supplemental
Indenture"), to the Indenture of Trust, dated as of September 15, 1991, between
the Company and Security Pacific Bank Washington, N.A., as trustee (the
"Trustee"), as amended and supplemented (the "Indenture"). Each capitalized term
not otherwise defined herein shall have the meaning given to such term in the
Indenture. The parties hereto agree as follows:
1. Appointment and Acceptance. X.X. Xxxxxx Securities Inc. hereby
accepts its appointment as the Remarketing Agent (the "Remarketing Agent") for
the 2002 Series B Bonds and hereby agrees to perform the duties and obligations
imposed upon it as Remarketing Agent under the Eleventh Supplemental Indenture
and hereunder and agrees to keep such books and records with respect to its
duties as Remarketing Agent under the Eleventh Supplemental Indenture and
hereunder as shall be consistent with prudent industry practice and to make such
books and records available for inspection by the Company and the Trustee at all
reasonable times. During an Auction Period, the Remarketing Agent shall approve
(which approval shall not be unreasonably withheld) any additional
Broker-Dealers selected by the Company. The Remarketing Agent represents that it
routinely engages in the remarketing of securities such as the 2002 Series B
Bonds and agrees that it will settle all transactions hereunder pursuant to
customary industry practice.
2. Fees and Expenses. From the date of their initial issuance, the 2002
Series B Bonds will accrue interest at an Auction Rate and be subject to
mandatory purchase and conversion as provided in the Eleventh Supplemental
Indenture. The 2002 Series B Bonds are not subject to purchase on demand of the
owners of the 2002 Series B Bonds during an Auction Period, including the
Initial Period. If the 2002 Series B Bonds are subject to mandatory purchase or
if the Company elects to convert the interest rate mode of the 2002 Series B
Bonds to accrue interest at the Daily Rate, the Weekly Rate or the Flexible
Rate, the Company shall pay the Remarketing Agent directly, as compensation for
its services hereunder, a fee that will be agreed to by the parties prior to the
date of remarketing of such 2002 Series B Bonds in accordance with the then
prevailing market conditions. During an Auction Period, including the Initial
Period, the Remarketing Agent shall receive no compensation from the Company, in
consideration of the services to be performed by the Remarketing Agent under
this Agreement and the Eleventh Supplemental Indenture, and except during an
Auction Period, including the Initial Period, the Company will pay all expenses
of delivering remarketed 2002 Series B Bonds and reimburse the Remarketing Agent
for all direct, out-of-pocket expenses incurred by it as Remarketing Agent,
including reasonable counsel fees and disbursements.
3. Disclosure Document. If the Remarketing Agent reasonably determines
that it is necessary or desirable to use a Disclosure Document (as defined in
Section 4) in connection with the remarketing of the 2002 Series B Bonds, the
Remarketing Agent will notify the Company and the Company will provide the
Remarketing Agent with a Disclosure Document reasonably satisfactory to the
Remarketing Agent and its counsel in respect of the 2002 Series B Bonds. The
Company will supply the Remarketing Agent with such number of copies of the
Disclosure Document as the Remarketing Agent reasonably requests from time to
time. The Company will supplement and amend the Disclosure Document so that at
all times during the remarketing the Disclosure Document will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements in the Disclosure Document, in the light of the
circumstances under which they were made, not misleading.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Remarketing
Agent and each person, if any, who controls the Remarketing Agent within the
meaning of either Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in a Disclosure Document (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
the Remarketing Agent furnished to the Company in writing by the Remarketing
Agent expressly for use therein. A "Disclosure Document" means (i) any
registration statement relating to the 2002 Series B Bonds, as amended at the
time when it shall become effective, or, if a post-effective amendment is filed
with respect thereto, as amended by such post-effective amendment at the time of
its effectiveness, including in each case information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act and any abbreviated registration statement filed
pursuant to Rule 462(b) under the Securities Act with respect to the 2002 Series
B Bonds, (ii) a prospectus in the form first used to confirm sales of the 2002
Series B Bonds, as amended or supplemented, or (iii) any other disclosure
statement relating to the offer and sale of the 2002 Series B Bonds.
(b) The Remarketing Agent agrees to indemnify and hold harmless the
Company and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to the Remarketing Agent, but only
with reference to information relating to the Remarketing Agent furnished to the
Company in writing by the Remarketing Agent expressly for use in the Disclosure
Document or any amendment or supplement thereto.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
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Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Remarketing
Agent and such control persons of the Remarketing Agent shall be designated in
writing by the Remarketing Agent and any such separate firm for the Company, its
directors, its officers who sign the Disclosure Document and such control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 4 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Remarketing Agent on
the other hand from the offering of the 2002 Series B Bonds or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Remarketing Agent on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Remarketing Agent on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Remarketing Agent and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
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(e) The Company and the Remarketing Agent agree that it would not be
just and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4, in no event shall the
Remarketing Agent be required to contribute any amount in excess of the amount
by which the total price at which the 2002 Series B Bonds were offered to the
public exceeds the amount of any damages that the Remarketing Agent has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The remedies provided for in this Section 4 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law of in equity.
(g) The indemnity and contribution agreements contained in this Section
4 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, and (ii) any investigation made by or on behalf
of the Remarketing Agent or the person controlling the Remarketing Agent or by
or on behalf of the Company, its officers or directors or any other person
controlling the Company.
5. Remarketing Agent's Liabilities. The Remarketing Agent shall incur
no liability to the Company or any other party for its actions as Remarketing
Agent pursuant to the terms hereof and of the Indenture except for (i) the
liabilities for which the Remarketing Agent has agreed to indemnify the Company
and others pursuant to Section 4(b) above, and (ii) its negligence or willful
misconduct. The obligation of the Remarketing Agent to remarket 2002 Series B
Bonds hereunder shall be on a best efforts basis.
6. Termination. (a) The Remarketing Agent will resign if requested by
the Company by an instrument filed with the Remarketing Agent and the Trustee
and may resign at any time on 30 days' written notice to the Company, and the
Trustee. Following termination, the provisions of Sections 4 and 5 will continue
in effect as to transactions prior to the date of termination, and each party
will pay the other any amounts owing at the time of termination. The Remarketing
Agent may cease remarketing and selling the 2002 Series B Bonds with immediate
effect if it determines, in its reasonable judgment, that it is not advisable to
attempt to remarket the 2002 Series B Bonds for any reason, including without
limitation, (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities shall have
been declared by either federal authorities or state authorities of New York or
the state where the paying office of the Trustee with respect to the 2002 Series
B Bonds is located, (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the judgment of the Remarketing Agent, is material and adverse and which, in
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the judgment of the Remarketing Agent, makes it impracticable to market the 2002
Series B Bonds on the terms and in the manner contemplated in the Disclosure
Document, (v) a material adverse change in the financial condition of the
Company, (vi) a down-rating of the 2002 Series B Bonds, (vii) an imposition of
material restrictions on the 2002 Series B Bonds or similar obligations, (viii)
a material misstatement or omission in the Disclosure Document as then modified
or supplemented, or (ix) notice is received of an event of default under the
Indenture.
(b) In the event of the resignation or removal of the Remarketing
Agent, the Company shall appoint a successor Remarketing Agent meeting the
qualifications set forth in the Indenture and the Remarketing Agent shall pay
over, assign and deliver any moneys and 2002 Series B Bonds held by it in such
capacity to its successor or, if there be no successor, to the Trustee. Any
resignation or removal of the Remarketing Agent shall not become effective until
the Company has appointed a successor Remarketing Agent in accordance with the
Indenture.
7. Dealing in 2002 Series B Bonds by Remarketing Agent. (a) The
Remarketing Agent, in its individual capacity, either as principal or agent, may
buy, sell, own, hold and deal in any of the 2002 Series B Bonds, and may join in
any action which any owner of any Series B Bond may be entitled to take with
like effect as if it did not act in any capacity hereunder. The Remarketing
Agent, in its individual capacity, either as principal or agent, may also engage
in or be interested in any financial or other transaction with the Company and
may act as depositary, trustee or agent for any committee or body of Holders or
other obligations of the Company as freely as if it did not act in any capacity
hereunder.
(b) In connection with 2002 Series B Bonds accruing interest at an
Auction Rate, the Remarketing Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust of or with any
of the owners of such 2002 Series B Bonds.
8. Intention of Parties. It is the express intention of the parties
hereto that no purchase, sale or transfer of any 2002 Series B Bonds, as herein
provided, shall constitute or be construed to be the extinguishment of any 2002
Series B Bond or the indebtedness represented thereby or the reissuance of any
2002 Series B Bond or the refunding of any indebtedness represented thereby.
9. Notices. Unless otherwise provided, all notices, requests, demands
and formal actions hereunder shall be in writing and mailed, telegraphed or
delivered, if sent to the Company, to Chugach Electric Association, Inc., 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx 00000-0000, Attention: Executive Manager,
Finance and Energy Supply, and if sent to the Remarketing Agent, to 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Harris Kretsge, which is
hereby designated as the Remarketing Agent's principal office for the purpose of
the Indenture.
10. Governing Law. This Agreement will be governed by the laws of the
State of New York.
(Signatures follow on next page.)
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IN WITNESS WHEREOF, the Remarketing Agent and the Company, intending to
be legally bound, have caused their duly authorized representatives to execute
and deliver this Agreement as of the date first written above.
CHUGACH ELECTRIC ASSOCIATION, INC.
By:
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Title:
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X.X. XXXXXX SECURITIES INC.
By:
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Title:
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