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FINANCING AGREEMENT
Dated as of November 1, 1997
By and Between
COCONINO COUNTY, ARIZONA POLLUTION CONTROL CORPORATION
and
NEVADA POWER COMPANY
RELATING TO
POLLUTION CONTROL REVENUE BONDS
(NEVADA POWER COMPANY PROJECT)
SERIES 1997B
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The amounts payable to the Issuer (except for amounts
payable to, and certain rights and privileges of, the Issuer
under Sections 3.1, 4.2(e), 4.2(g), 5.3 and 6.4 hereof and any
rights of the Issuer to receive any notices, certificates,
requests, requisitions or communications hereunder) and certain
other rights of the Issuer under this Financing Agreement have
been pledged and assigned under the Indenture of Trust dated as
of November 1, 1997, between the Issuer and United States Trust
Company of New York, as Trustee.
FINANCING AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of this Agreement
and is only for convenience of reference)
SECTION HEADING PAGE
ARTICLE I DEFINITIONS........................................1
ARTICLE II REPRESENTATIONS....................................5
Section 2.1. Representations and Covenants by the Issuer......5
Section 2.2. Representations by the Company...................6
ARTICLE III COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS...7
Section 3.1. Agreement to Complete the Acquisition,
Construction and Equipping of the Project........7
Section 3.2. Agreement to Issue Bonds; Application
of Bond Proceeds.................................7
Section 3.3. Disbursements from the Construction Fund.........8
Section 3.4. Establishment of Completion Date.................9
Section 3.5. Investment of Moneys in the Bond Fund
and Construction Fund............................9
Section 3.6. Tax Exempt Status of Bonds......................11
ARTICLE IV LOAN AND PROVISIONS FOR REPAYMENT.................11
Section 4.1. Loan of Bond Proceeds...........................11
Section 4.2. Loan Repayments and Other Amounts
Payable.........................................11
Section 4.3. No Defense or Set-Off...........................13
Section 4.4. Payments Pledged and Assigned...................13
Section 4.5. Letter of Credit and Credit Facility............14
Section 4.6. Payment of the Bonds and Other Amounts..........15
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS..................15
[Section 5.1. Company to Maintain Its Corporate Existence;
Conditions under Which Exceptions Permitted.....15
Section 5.2. Annual Statement................................16
Section 5.3. Maintenance and Repair; Insurance;
Taxes; Etc......................................16
Section 5.4. Recordation and Other Instruments...............16
Section 5.5. No Warranty by the Issuer.......................16
Section 5.6. Agreement as to Ownership and Use of
the Project.....................................16
Section 5.7. Company to Furnish Notice of Adjustments
of Interest Rate Periods........................16
Section 5.8. Information Reporting, Etc......................17
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Section 5.9. Limited Liability of Issuer.....................17
Section 5.10. Inspection of Project...........................17
Section 5.11. Purchases of Bonds by Company or Issuer
Prohibited; Exceptions..........................17
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES....................18
Section 6.1. Events of Default Defined.......................18
Section 6.2. Remedies on Default.............................19
Section 6.3. No Remedy Exclusive.............................20
Section 6.4. Agreement to Pay Fees and Expenses of
Counsel.........................................20
Section 6.5. No Additional Waiver Implied by One
Waiver; Consents to Waivers.....................20
ARTICLE VII OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS..................21
Section 7.1. Option to Prepay................................21
Section 7.2. Obligation to Prepay............................21
Section 7.3. Notice of Prepayment............................21
ARTICLE VIII MISCELLANEOUS.....................................22
Section 8.1. Notices.........................................22
Section 8.2. Assignments.....................................22
Section 8.3. Severability....................................23
Section 8.4. Execution of Counterparts.......................23
Section 8.5. Amounts Remaining in Bond Fund..................23
Section 8.6. Amendments, Changes and Modifications...........23
Section 8.7. Governing Law...................................23
Section 8.8. Authorized Issuer and Company
Representatives.................................23
Section 8.9. Term of the Agreement...........................24
Section 8.10. Cancellation at Expiration of Term..............24
Section 8.11. References to Bank and Provider.................24
Section 8.12. Specific Request for Ratings Required...........24
Section 8.13. Notice Regarding Cancellation of
Contracts.......................................24
Signatures.......................................................26
EXHIBIT A - DESCRIPTION OF THE PROJECT
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THIS FINANCING AGREEMENT made and entered into as of
November 1, 1997, by and between COCONINO COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION, an Arizona nonprofit corporation
and political subdivision of the State of Arizona, party of the
first part (hereinafter referred to as the "Issuer"), and NEVADA
POWER COMPANY, a corporation duly organized and existing under
the laws of the State of Nevada, party of the second part
(hereinafter referred to as the "Company"),
WITNESSETH:
In consideration of the respective representations and
agreements hereinafter contained, the parties hereto agree as
follows (provided, that in the performance of the agreements of
the Issuer herein contained, any obligation it may thereby incur
shall not constitute or give rise to a pecuniary liability or a
charge upon its general credit or against its taxing powers but
shall be payable solely out of the Revenues (as hereinafter
defined) derived from this Financing Agreement and the Bonds, as
hereinafter defined):
ARTICLE I
DEFINITIONS;
The following terms shall have the meanings specified in
this Article unless the context clearly requires otherwise. The
singular shall include the plural and the masculine shall include
the feminine.
"Act" means Title 35, Chapter 6, Arizona Revised Statutes,
as amended.
"Act of Bankruptcy" means the filing of a petition in
bankruptcy by or against the Company or the Issuer under the
Bankruptcy Code.
"Administrative Expenses" means the reasonable and necessary
expenses (including the reasonable value of employee services and
fees of Counsel) incurred by the Issuer in connection with the
Bonds, this Agreement, the Indenture and any transaction or event
contemplated by this Agreement or the Indenture.
"Agreement" means this Financing Agreement by and between
the Issuer and the Company, as from time to time amended and
supplemented.
"Authorized Company Representative" means any person who, at
the time, shall have been designated to act on behalf of the
Company by a written certificate furnished to the Issuer, the
Remarketing Agent and the Trustee containing the specimen
signature of such person and signed on behalf of the Company by
any officer of the Company. Such certificate may designate an
alternate or alternates.
"Authorized Issuer Representative" means any person at the
time designated to act on behalf of the Issuer by a written
certificate furnished to the Company and the Trustee
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containing the specimen signature of such person and signed on
behalf of the Issuer by its President, Vice President or
Secretary. Such certificate may designate an alternate or
alternates.
"Bank" means the Provider of any Letter of Credit delivered
in accordance with Section 4.5 of this Agreement, in its capacity
as issuer of such Letter of Credit, its successors in such
capacity, and its assigns.
"Bankruptcy Code" means the United States Bankruptcy Reform
Act of 1978, as amended from time to time, or any substitute or
replacement legislation.
"Bond" or "Bonds" means any one or more of the bonds
authorized, authenticated and delivered under the Indenture.
"Bond Counsel" means the Counsel who renders the opinion as
to the tax-exempt status of interest on the Bonds or other
nationally recognized municipal bond counsel mutually acceptable
to the Issuer, the Trustee, the Bank and the Company.
"Bond Fund" means the fund created by Section 6.02 of the
Indenture.
"Business Day" means a day on which banks located in the
city in which the Principal Office of the Trustee is located and
in the city or cities in which any office at which any action
must be instituted or taken in order to realize upon any Letter
of Credit or Credit Facility then in effect is or are located,
are not required or authorized to remain closed and on which the
New York Stock Exchange is not closed.
"Code" means the United States Internal Revenue Code of
1986, as amended, and regulations promulgated or proposed
thereunder.
"Company" means Nevada Power Company, a Nevada corporation,
and its successors and assigns and any surviving, resulting or
transferee corporation as permitted in Section 5.1 hereof.
"Completion Date" means the date of completion of the
acquisition and construction of the Project as that date shall be
certified as provided in Section 3.4 hereof.
"Construction Fund" means the fund created by Section 6.07
of the Indenture.
"Construction Period" means the period between the beginning
of construction and equipping of the Project or the date on which
the Bonds are first delivered to the purchasers thereof,
whichever is earlier, and the Completion Date.
"Cost" or "Cost of the Project" means the items authorized
to be paid from the Construction Fund pursuant to the provisions
of paragraphs (a) to (i), inclusive, of Section 3.3 hereof.
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"Counsel" means an attorney at law or a firm of attorneys
(who may be an employee of or counsel to the Issuer or the
Company or the Trustee) duly admitted to the practice of law
before the highest court of any state of the United States of
America or of the District of Columbia.
"Credit Facility" means any credit facility, including any
instruments accompanying or relating to such Credit Facility
delivered to the Trustee in connection therewith, provided in
accordance with Section 4.5 of this Agreement.
"Exempt Facilities" means pollution facilities within the
meaning of Section 103(b)(4)(F) of the Internal Revenue Code of
1954, as amended, and regulations promulgated or proposed
thereunder.
"Extraordinary Services" and "Extraordinary Expenses" means
all services rendered and all expenses (including fees of
Counsel) incurred under the Indenture and the Tax Agreement other
than Ordinary Services and Ordinary Expenses.
"Fitch" means Fitch Investors Service, L.P., a limited
partnership organized and existing under the laws of the State of
New York, its successors and their assigns, and, if such limited
partnership shall be dissolved or liquidated or is no longer
performing the functions of a securities rating agency, "Fitch"
shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Company and acceptable
to the Bank, with notice to the Trustee.
"Force Majeure" means acts of God, strikes, lockouts or
other industrial disturbances; acts of public enemies; orders or
restraints of any kind of the governments of the United States or
of the State, or any of their departments, agencies or officials,
or any civil or military authority; insurrections; riots;
landslides; lightning; earthquakes; fires; tornadoes; volcanoes;
storms; droughts; floods; explosions, breakage, or malfunction or
accident to machinery, transmission lines, pipes or canals, even
if resulting from negligence; civil disturbances; or any other
cause not reasonably within the control of the Company.
"Governing Body" means the Board of Directors of the Issuer.
"Hereof," "herein," "hereunder" and other words of similar
import refer to this Agreement as a whole.
"Indenture" means the Indenture of Trust relating to this
Agreement between the Issuer and United States Trust Company of
New York, as Trustee, of even date herewith, pursuant to which
the Bonds are authorized to be issued, including any indentures
supplemental thereto or amendatory thereof.
"Insider" shall have the meaning set forth in the Bankruptcy
Code.
"Issuer" means Coconino County, Arizona Pollution Control
Corporation, and any successor body to the duties or functions of
the Issuer.
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"Letter of Credit" means any irrevocable direct-pay Letter
of Credit issued by a Bank to the Trustee, including any
extensions thereof, delivered in accordance with Section 4.5 of
this Agreement.
"Moody's" means ▇▇▇▇▇'▇ 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 and acceptable
to the Bank, with notice to the Trustee.
"Ordinary Services" and "Ordinary Expenses" means those
services normally rendered and those expenses, including fees of
Counsel, normally incurred by a trustee or paying agent under
instruments similar to the Indenture and the Tax Agreement.
"Original Purchaser" means Bear, ▇▇▇▇▇▇▇ & Co. Inc., acting
on behalf of itself and others.
"Owner" or "owner of Bonds" means the Person or Persons in
whose name or names a Bond shall be registered on books of the
Issuer kept by the Registrar for that purpose in accordance with
the terms of the Indenture.
"Person" means natural persons, firms, partnerships,
associations, corporations, trusts and public bodies.
"Project" means the facilities described in Exhibit A to
this Agreement, as it may be amended and supplemented from time
to time.
"Project Certificate" means the Company's Project
Certificate, delivered concurrently with the issuance of the
Bonds, with respect to certain facts which are within the
knowledge of the Company and certain reasonable assumptions of
the Company, to enable ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as Bond Counsel, to
determine that interest on the Bonds is not includable in the
gross income of the Owners of the Bonds for federal income taxes
purposes.
"Rebate Fund" means the Rebate Fund, if any, created and
established pursuant to the Tax Agreement and Section 6.21 of the
Indenture.
"Reimbursement Agreement" means any reimbursement agreement
between the Company and a Bank pursuant to which a Letter of
Credit is issued by such Bank and delivered to the Trustee, and
in each case any and all modifications, amendments and
supplements thereto.
"Remarketing Agent" means the remarketing agent, if any,
appointed in accordance with Section 4.11 of the Indenture and
any permitted successor thereto.
"Revenues" means the amounts pledged under the Indenture to
the payment of principal of, premium, if any, and interest on the
Bonds, consisting of the following: (i) all amounts
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payable from time to time by the Company under Section
4.2(a) of this Agreement, and all receipts of the Trustee
credited under the provisions of the Indenture against said
amounts payable, including all moneys drawn by the Trustee
under a Letter of Credit to pay the principal of and premium,
if any, and interest on the Bonds and all amounts realized by
the Trustee from any Credit Facility to pay the principal of and
premium, if any, and interest on the Bonds, all of which amounts
are to be deposited in the Bond Fund, (ii) any portion of the
net proceeds of the Bonds deposited with the Trustee in the
Bond Fund under Section 6.03 of the Indenture and (iii) any
amounts paid into the Bond Fund from the Construction Fund,
including income on investments.
"S&P" means Standard & Poor's Rating Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., a corporation organized and
existing under the laws of the State of New York, its successors
and their assigns, and, if such division or 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 and acceptable to the Bank, with notice
to the Trustee.
"State" means the State of Arizona.
"Tax Agreement" means the Tax Exemption Certificate and
Agreement with respect to the Bonds, dated the date of the
delivery of the Bonds, among the Company, the Issuer and the
Trustee, as from time to time amended and supplemented.
"Trust Estate" means the property conveyed to the Trustee
pursuant to the Granting Clauses of the Indenture.
"Trustee" means United States Trust Company of New York, as
trustee under the Indenture and any successor trustee appointed
pursuant to Section 10.06 or 10.09 of the Indenture at the time
serving as successor Trustee thereunder, and any separate or co-
trustee serving as such thereunder.
All other terms used herein which are defined in the
Indenture shall have the same meanings assigned them in the
Indenture unless the context otherwise requires.
ARTICLE II
REPRESENTATIONS;
SECTION 2.1. REPRESENTATIONS AND COVENANTS BY THE SSUER. The
Issuer makes the following representations and covenants as the
basis for the undertakings on its part herein contained:
(a) The Issuer is a duly organized and existing
political subdivision of the State. Under the provisions of
the Act, the Issuer is authorized to enter into the
transactions contemplated by this Agreement, the Indenture
and the Tax Agreement and
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to carry out its obligations hereunder and thereunder.
The Issuer has duly authorized the execution and delivery of
this Agreement, the Indenture and the Tax Agreement.
(b) The Bonds are to be issued under and secured by
the Indenture, pursuant to which certain of the Issuer's
interests in this Agreement and the Revenues derived by the
Issuer pursuant to this Agreement will be pledged and
assigned as security for payment of the principal of,
premium, if any, and interest on, the Bonds.
(c) The Governing Body of the Issuer has found that
the issuance of the Bonds will further the public purposes
of the Act.
(d) The Issuer has not assigned and will not assign
any of its interests in this Agreement other than pursuant
to the Indenture.
(e) No member of the Governing Body of the Issuer, nor
any other officer of the Issuer, has any interest,
financial, employment or other, in the Company or in the
transactions contemplated hereby.
SECTION 2.2. REPRESENTAITONS BY THE COMPANY. The Company
makes the following representations as the basis for the
undertakings on its part herein contained:
(a) The Company is a corporation duly incorporated
under the laws of the State and is in good standing in the
State, is qualified to do business as a foreign corporation
in all other states and jurisdictions wherein the nature of
the business transacted by the Company or the nature of the
property owned or leased by it makes such licensing or
qualification necessary, has power to enter into and by
proper corporate action has been duly authorized to execute
and deliver this Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this
Agreement or the Tax Agreement, the consummation of the
transactions contemplated hereby and thereby, nor the
fulfillment of or compliance with the terms and conditions
of this Agreement and the Tax Agreement, conflicts with or
results in a breach of any of the terms, conditions or
provisions of any corporate restriction or any agreement or
instrument to which the Company is now a party or by which
it is bound, or constitutes a default under any of the
foregoing, or results in the creation or imposition of any
lien, charge or encumbrance whatsoever upon any of the
property or assets of the Company under the terms of any
instrument or agreement other than the Indenture.
(c) The statements, information and descriptions
contained in the Project Certificate and the Tax Agreement,
as of the date hereof and at the time of the delivery of the
Bonds to the Original Purchaser, are and will be true,
correct and complete, do not and will not contain any untrue
statement or misleading statement of a material fact, and do
not and will not omit to state a material fact required to
be stated therein or necessary to make the statements,
information and descriptions contained therein, in the light
of the circumstances under which they were made, not
misleading, and the estimates and the assumptions contained
in the Project Certificate and the Tax
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Agreement, as of the date hereof and as of the date of
issuance and delivery of the Bonds, are and will be
reasonable and based on the best information available to the
Company.
ARTICLE III
COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO COMPLETE THE ACQUISITION,
CONSTRUCTION AND EQUIPPING OF THE PROJECT.. The Company agrees
that it will complete or cause to be completed the acquisition,
construction and equipping of the Project with such reasonable
dispatch as it shall deem prudent in the conduct of its
affairs, and that the Project, while operated by the Company,
as herein provided, will at all times be a "project" within the
meaning of the Act and be Exempt Facilities.
Exhibit A hereto may be amended or supplemented by the
Company from time to time, to add to or remove from the Project
any item or interest therein or to change the nature of all or
any part of the facilities constituting the Project, provided
that there shall be delivered by the Company to the Issuer and
the Trustee in connection with any such amendment or supplement:
(i) a certificate of the Authorized Company
Representative describing the proposed changes and stating
that they will not have the effect of disqualifying the
Project as a "project" within the meaning of the Act or as
Exempt Facilities;
(ii) a copy of the amendment or supplement to Exhibit A
hereto and such other documents, certificates and showings
as may be required by Counsel rendering the opinion in
clause (iii) of this paragraph; and
(iii) an opinion of Bond Counsel to the effect that such
amendment complies with the requirements of this Section 3.1
and is in proper form for execution and delivery by the
Issuer and that the exemption from federal income taxes of
interest on the Bonds is not adversely affected by reason of
such amendment and the changes in the Project contemplated
thereby.
SECTION 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND
PROCEEDS. In order to provide funds to lend to the Company to
finance the Cost of the Project as provided in Section 4.1
hereof, the Issuer agrees that it will issue under the Indenture,
sell and cause to be delivered to the Original Purchaser thereof,
its Bonds in the aggregate principal amount of $20,000,000,
bearing interest and maturing as set forth in the Indenture. The
Issuer will thereupon deposit the proceeds received from the sale
of the Bonds as follows: (1) in the Bond Fund, a sum equal to
any accrued interest paid by the Original Purchaser of the Bonds;
and (2) in the Construction Fund, the balance of the proceeds
(net of underwriting discount) from the sale of the Bonds.
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SECTION 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The
Issuer will in the Indenture authorize and direct the Trustee to
disburse the moneys in the Construction Fund to or on behalf of
the Company, upon compliance with Section 6.07 of the Indenture,
for the following purposes (but, subject to the provisions
of Section 3.5 hereof, for no other purpose):
(a) Payment to the Company of such amounts, if any, as
shall be necessary to reimburse the Company in full for all
advances and payments made by it at any time prior to or
after the delivery of the Bonds for expenditures in
connection with the preparation of plans and specifications
for the Project (including any preliminary study or planning
of the Project or any aspect thereof) and the acquisition,
construction and equipping of the Project.
(b) Payment of the initial or acceptance fees, if any,
of the Trustee, the Administrative Expenses of the Issuer,
bond insurance premium, legal and accounting fees and
expenses and printing and engraving costs incurred in
connection with the authorization, sale and issuance of the
Bonds and the preparation of this Agreement, the Indenture,
the Tax Agreement, the Bonds and all other documents in
connection with the authorization, sale and issuance of the
Bonds.
(c) Payment for labor, services, materials and
supplies used or furnished in site improvement and in the
construction and equipping of the Project and miscellaneous
expenditures incidental to any of the foregoing items.
(d) Payment of the fees, if any, for architectural,
engineering, legal, underwriting and supervisory services
with respect to the Project.
(e) Payment of the premiums on all insurance required
to be taken out and maintained in connection with the
Project during the Construction Period.
(f) Payment of the taxes, assessments and other
charges, if any, that may become payable during the
Construction Period with respect to the Project.
(g) Payment of expenses incurred in seeking to enforce
any remedy against any contractor or subcontractor or any
other third party in respect of any default under a contract
relating to the Project.
(h) Interest on the Bonds and any Letter of Credit
fees during the construction of the Project, but only to the
extent provided by the Project Certificate.
(i) Payment of any other costs which constitute a part
of the Cost of the Project in accordance with generally
accepted applicable accounting principles, which are
permitted by the Act and which will not adversely affect the
exemption from federal income taxes of interest on any of
the Bonds.
The Company covenants and agrees that it will not take any
action or authorize or permit, to the extent such action is
within its control, any action to be taken which would
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cause the interest on the Bonds to become includable in the
federal gross income of the Owners of the Bonds, provided that
the Company shall not have violated this covenant if the
interest on any of the Bonds becomes includable in the federal
gross income of an Owner or a beneficial owner who is a
"substantial user" of the Project or a "related person"
within the meaning of Section 147(a) of the Code. The
Company further covenants and agrees to comply with all of the
requirements and restrictions of the Project Certificate.
SECTION 3.4. ESTABLISHMENT OF COMPLETION DATE.. As
soon as practicable after the completion of construction of the
Project, and in any event not more than ninety (90) days
thereafter, the Company shall furnish to the Trustee a
certificate signed by an Authorized Company Representative
stating (i) that construction of the Project has been completed
substantially in accordance with the plans and specifications,
(ii) the Completion Date, (iii) the Cost of the Project, (iv) the
portion of the Cost of the Project which has then been paid and
(v) the portion of the Cost of the Project which has not yet then
been paid. Such certificate may state that it is given without
prejudice to any rights against third parties which exist at the
date of such certificate or which may subsequently come into
being.
Moneys (including investment proceeds) remaining in the
Construction Fund on the date of such certificate may be used, at
the direction of an Authorized Company Representative, to the
extent indicated, for the payment, in accordance with the
provisions of this Agreement, of any Cost of the Project not then
paid as specified in the above-mentioned certificate. Any moneys
(including investment proceeds) remaining in the Construction
Fund on the date of the aforesaid certificate and not so set
aside for the payment of such Cost of the Project shall be
transferred or disbursed in accordance with Section 1.142-2 of
the Regulations (as defined in the Tax Agreement) or any
successor thereto. The Company acknowledges that these
provisions generally require that a portion of the Bonds be
redeemed, or defeased to the first call date (with appropriate
notice to the Internal Revenue Service), within 90 days of the
earlier of (i) the date on which the Company determines that the
Project will not be completed or (ii) the date on which the
Project is Placed-in-Service (as defined in the Tax Agreement).
In the event the moneys in the Construction Fund available
for payment of the Cost of the Project should not be sufficient
to pay the costs thereof in full, the Company agrees to pay
directly, or to deposit in the Construction Fund moneys
sufficient to pay, the costs of completing the Project as may be
in excess of the moneys available therefor in the Construction
Fund. The Issuer does not make any warranty, either express or
implied, that the moneys which will be paid into the Construction
Fund and which, under the provisions of this Agreement, will be
available for payment of the Cost of the Project, will be
sufficient to pay all the costs which will be incurred in that
connection. The Company agrees that if after exhaustion of the
moneys in the Construction Fund the Company should pay, or
deposit moneys in the Construction Fund for the payment of, any
portion of the Cost of the Project pursuant to the provisions of
this Section, it shall not be entitled to any reimbursement
therefor from the Issuer or from the Trustee or from the owners
of any of the Bonds, nor shall it be entitled to any diminution
of the loan repayment installments or other amounts payable under
Section 4.2 hereof.
SECTION 3.5. INVESTMENT OF MONEYS IN THE BOND FUND AND
CONSTRUCITON FUND. Except as otherwise herein provided, any
moneys held as a part of the Bond Fund or
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the Construction Fund shall be invested or reinvested by the
Trustee at the written direction, or the oral direction
promptly confirmed in writing, of an Authorized Company
Representative as to specific investments, to the extent permitted
by law, in:
(a) bonds or other obligations of the United States of
America;
(b) bonds or other obligations, the payment of the
principal of and interest on which is unconditionally
guaranteed by the United States of America;
(c) obligations issued or guaranteed as to principal
and interest by any agency or person controlled or
supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the
Congress of the United States of America;
(d) obligations issued or guaranteed by any state of
the United States of America, or any political subdivision
of any such state, or in funds consisting of such
obligations to the extent described in Treasury Regulation
1.148-8(e)(3)(iii);
(e) prime commercial paper;
(f) prime finance company paper;
(g) bankers' acceptances drawn on and accepted by
commercial banks;
(h) repurchase agreements fully secured by obligations
issued or guaranteed as to principal and interest by the
United States of America or by any person controlled or
supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the
Congress of the United States of America;
(i) certificates of deposit issued by commercial
banks, including banks domiciled outside of the United
States of America; and
(j) units of taxable government money market
portfolios composed of obligations guaranteed as to
principal and interest by the United States of America or
repurchase agreements fully collateralized by such
obligations.
The investments so purchased shall be held by the Trustee
and shall be deemed at all times a part of the Bond Fund or
Construction Fund, as the case may be, and the interest accruing
thereon and any profit realized therefrom shall be credited to
such fund, subject to the provisions of the Tax Agreement. The
Company agrees that to the extent any moneys in the Bond Fund
represent moneys realized under a Letter of Credit or any Credit
Facility or moneys held for the payment of Bonds pursuant to
Sections 6.12 and 6.18 of the Indenture or moneys held for the
payment of the purchase price of Bonds pursuant to Article IV of
the Indenture, such moneys shall not be invested. In addition,
the Company agrees that to the extent that any moneys in the Bond
Fund represent moneys to be used to pay the premium portion of
the redemption price of Bonds pursuant to Section 3.01(A)(3) or
(4) of the
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Indenture, such moneys shall be invested only in Governmental
Obligations maturing on or before the applicable redemption
date or dates.
SECTION 3.6. TAX EXEMPT STATUS OF BONDS. The Company
covenants and agrees that it has not taken or permitted and will
not take or permit any action which results in interest paid on
the Bonds being included in gross income of the holders or
beneficial owners of the Bonds for purposes of federal income
taxation (other than a holder or beneficial owner who is a
"substantial user" of the Project or a "related person"
within the meaning of Section 147(a) of the Code). The
Company covenants that none of the proceeds of the Bonds or the
payments to be made under this Agreement, or any other funds which
may be deemed to be proceeds of the Bonds pursuant to Section
148(a) of the Code, will be invested or used in such a way, and
that no actions will be taken or not taken, as to cause the Bonds
to be treated as "arbitrage bonds" within the meaning of Section
148(a) of the Code. Without limiting the generality of the
foregoing, the Company covenants and agrees that it will comply
with the provisions of the Tax Agreement and the Project
Certificate.
ARTICLE IV
LOAN AND PROVISIONS FOR REPAYMENT;
SECTION 4.1. LOAN OF BOND PROCEEDS. (a) The Issuer agrees,
upon the terms and conditions in this Agreement, to lend to the
Company the proceeds (exclusive of accrued interest, if any)
received by the Issuer from the sale of the Bonds in order to
pay the Cost of the Project and the Company agrees to apply
the gross proceeds of such loan to pay the Cost of the
Project or as otherwise permitted in Section 3.4 hereof.
(b) The Issuer and the Company expressly reserve the right
to enter into, to the extent permitted by law, an agreement or
agreements other than this Agreement, with respect to the
issuance by the Issuer, under an indenture or indentures other
than the Indenture, of obligations to provide additional funds to
pay the Cost of the Project or to refund all or any principal
amount of the Bonds, or any combination thereof.
SECTION 4.2. LOAN REPAYMENTS AND OTHER AMOUNTS PAYABLE.
(a) On each date provided in or pursuant to the
Indenture for the payment (whether at maturity or upon redemption
or acceleration) of principal of, and premium, if any, and
interest on, the Bonds, until the principal of, and premium, if
any, and interest on, the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in
accordance with the Indenture, the Company shall pay to the
Trustee in immediately available funds, for deposit in the Bond
Fund, as a repayment installment of the loan of the proceeds of
the Bonds pursuant to Section 4.1(a) hereof, a sum equal to the
amount payable on such date (whether at maturity or upon
redemption or acceleration) as principal of, and premium, if any,
and interest on, the Bonds as provided in the Indenture;
provided, however, that the obligation of the Company to make any
such payment shall be deemed to be satisfied and discharged to
the extent of the corresponding payment realized by the Trustee
under any Letter of Credit or Credit Facility; and provided
further, that the obligation of the Company to make any such
repayment
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installment shall be reduced by the amount of any moneys then
on deposit in the Bond Fund and available for such payment.
(b) The Company shall pay to the Trustee amounts equal to
the amounts to be paid by the Trustee for the purchase of Bonds
pursuant to Article IV of the Indenture. Such amounts shall be
paid by the Company to the Trustee in immediately available funds
on the date such payments pursuant to Section 4.05 of the
Indenture are to be made; provided, however, that the obligation
of the Company to make any such payment shall be deemed to be
satisfied and discharged to the extent of the corresponding
payment realized by the Trustee under any Letter of Credit or
Credit Facility or to the extent moneys are available from the
sources described in clauses (i) and (ii) of Section 4.05(a) of
the Indenture.
(c) The Company agrees to pay to the Trustee (i) the fees
of the Trustee for the Ordinary Services rendered by it and an
amount equal to the Ordinary Expenses incurred by it under the
Indenture and the Tax Agreement, as and when the same become due,
and (ii) the reasonable fees, charges and expenses of the Trustee
for reasonable Extraordinary Services and Extraordinary Expenses,
as and when the same become due, incurred under the Indenture and
the Tax Agreement. The Company agrees that the Trustee, its
officers, agents, servants and employees, shall not be liable
for, and agrees that it will at all times indemnify and hold
harmless the Trustee, its officers, agents, servants and
employees against, and pay all expenses of the Trustee, its
officers, agents, servants and employees, relating to any
lawsuit, proceeding or claim and resulting from any action or
omission taken or made by or on behalf of the Trustee, its
officers, agents, servants and employees pursuant to this
Agreement, the Indenture or the Tax Agreement, that may be
occasioned by any cause (other than the negligence or willful
misconduct of the Trustee, its officers, agents, servants and
employees). In case any action shall be brought against the
Trustee in respect of which indemnity may be sought against the
Company, the Trustee shall promptly notify the Company in writing
and the Company shall be entitled to assume control of the
defense thereof, including the employment of Counsel and the
payment of all expenses. The Trustee shall have the right to
employ separate Counsel in any such action and participate in the
defense thereof, but the fees and expenses of such Counsel shall
be paid by the Trustee unless the employment of such Counsel has
been authorized by the Company. The Company shall not be liable
for any settlement of any such action without its consent, but if
any such action is settled with the consent of the Company or if
there be final judgment for the plaintiff in any such action, the
Company agrees to indemnify and hold harmless the Trustee from
and against any loss or liability by reason of such settlement or
final judgment. The Company agrees that the indemnification
provided herein shall survive the termination of this Agreement
or the Indenture or the resignation of the Trustee.
(d) The Company agrees to pay all costs incurred in
connection with the issuance of the Bonds (which may be paid from
the proceeds of the Bonds to the extent permitted by the Project
Certificate) and the Issuer shall have no obligation with respect
to such costs.
(e) The Company agrees to indemnify and hold harmless the
Issuer and any member, officer, official or employee of the
Issuer against any and all losses, costs, charges, expenses,
judgments and liabilities created by or arising out of this
Agreement, the Indenture or the Tax Agreement or otherwise
incurred in connection with the issuance of the Bonds. The
Issuer
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may submit to the Company periodic statements, not more
frequently than monthly, for its Administrative Expenses and the
Company shall make payment to the Issuer of the full amount of
each such statement within 30 days after the Company receives
such statement.
(f) The Company agrees to pay to the Remarketing Agent, if
any, the reasonable fees, charges and expenses of such
Remarketing Agent, and the Issuer shall have no obligation or
liability with respect to the payment of any such fees, charges
or expenses.
(g) In the event the Company shall fail to make any of the
payments required by (a) or (b) of this Section 4.2, the payment
so in default shall continue as an obligation of the Company
until the amount in default shall have been fully paid and the
Company will pay interest to the extent permitted by law, on any
overdue amount at the rate of interest borne by the Bonds on the
date on which such amount became due and payable until paid. In
the event that the Company shall fail to make any of the payments
required by (c), (d), (e) or (f) of this Section 4.2, the payment
so in default shall continue as an obligation of the Company
until the amount in default shall have been fully paid, and the
Company agrees to pay the same with interest thereon to the
extent permitted by law at a rate 1% above the rate of interest
then charged by the Trustee on 90-day commercial loans to its
prime commercial borrowers until paid.
(h) To the extent that a Letter of Credit is in effect and
moneys on deposit in the Bond Fund constitute Available Moneys or
have been deposited in separate, segregated accounts in the Bond
Fund for the purpose of becoming Available Moneys, such moneys
shall not be available for transfer and shall not be transferred
from the Bond Fund to the Rebate Fund to satisfy the requirements
of the Tax Agreement (unless the Company fails to pay the amounts
described below). In the event that moneys are not available for
transfer from the Bond Fund to the Rebate Fund as required by the
Tax Agreement, the Company agrees to pay any such amount required
to be so transferred and not available for such purpose in the
Bond Fund by paying such amount to the Trustee for deposit
directly into the Rebate Fund. The obligation of the Company set
forth in this Section 4.2(h) shall survive the termination of
this Agreement.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the
Company to make the payments pursuant to this Agreement shall
be absolute and unconditional without defense or set-off by
reason of any default by the Issuer under this Agreement or under
any other agreement between the Company and the Issuer or for
any other reason, it being the intention of the parties that the
payments required hereunder will be paid in full when due
without any delay or diminution whatsoever.
SECTION 4.4. PAYMENTS PLEDGED AND ASSIGNED. It is
understood and agreed that all payments required to be made by
the Company pursuant to Section 4.2 hereof (except payments made
to the Trustee pursuant to Section 4.2(c) hereof, to any
Remarketing Agent pursuant to Section 4.2(f) hereof, to the
Issuer pursuant to Section 4.2(e) hereof and to any or all the
Issuer and the Trustee and any Remarketing Agent pursuant to
Section 4.2(g) hereof) and certain rights of the Issuer
hereunder are pledged and assigned by the Indenture. The
Company consents to such pledge and assignment. The Issuer
hereby directs the Company and the Company hereby agrees to
pay or cause to be paid to the Trustee all said amounts except
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payments to be made to any Remarketing Agent pursuant to
Section 4.2(f) hereof and payments to be made to the Issuer
pursuant to Sections 4.2(e) and (g) hereof. The Project will not
constitute any part of the security for the Bonds.
SECTION 4.5. LETTER OF CREDIT AND CREDIT FACILITY.
(a) The Company has no obligation to provide a Letter of Credit
or other Credit Facility hereunder. At any time the Company may,
at its option, provide for the delivery to the Trustee of a
Letter of Credit or a Credit Facility.
(b) Any Letter of Credit delivered to the Trustee hereunder
will comply with the provisions of Section 6.19(b) of the
Indenture. Any Credit Facility (a) may consist, at the option of
the Company, of (i) first mortgage bonds of the Company, (ii) a
letter of credit, (iii) a standby bond purchase agreement, (iv)
bond insurance or (v) such other security or credit support as
the Company may elect to furnish, or any combination thereof.
(c) As a condition to the exercise by the Company of its
option set forth in Section 4.5(b) hereof to deliver a Letter of
Credit or other Credit Facility, the Company shall provide to the
Issuer and the Trustee a notice specifying (i) that a Letter of
Credit or other Credit Facility will be delivered to the Trustee,
(ii) the effective date of such delivery (which must be at least
five Business Days prior to the date of delivery of such Letter
of Credit or other Credit Facility and, if a Letter of Credit or
other Credit Facility is then in effect, must also be at least
five Business Days prior to the date such existing Letter of
Credit or other Credit Facility is to expire by its terms), (iii)
if applicable, the form and substance of the Letter of Credit or
other Credit Facility then in effect, and (iv) the form and
substance of the Letter of Credit or other Credit Facility to be
in effect on the date specified in (ii) above. Such notice to
the Trustee must be delivered by the Company at least ten
Business Days prior to the effective date of such Letter of
Credit or Credit Facility or, if a Letter of Credit or other
Credit Facility is then in effect, at least 20 days prior to the
fifth Business Day next preceding the effective date of such
delivery, and must be accompanied by the opinion of Bond Counsel
required by Section 6.19 or 6.20 of the Indenture, as the case
may be, and (i) if a Letter of Credit or other Credit Facility is
then in effect, a letter from ▇▇▇▇▇'▇, if the Bonds should then
be rated by ▇▇▇▇▇'▇, and from S&P, if the Bonds should then be
rated by S&P, and from Fitch, if the Bonds are then rated by
Fitch, to the effect that the substitution of the proposed Letter
of Credit or other Credit Facility for the Letter of Credit or
other Credit Facility then in effect will not by itself result in
a reduction, suspension or withdrawal of its ratings of the Bonds
which then prevail (except that such rating evidence shall not be
required if the Bonds are subject to mandatory tender for
purchase pursuant to Section 4.02(a)(iii) of the Indenture), and
(ii) the form of the substitute Letter of Credit or other Credit
Facility to be in place on the effective date of such change,
together with any documentation and opinions referred to by
▇▇▇▇▇'▇ or S&P or Fitch, as the case may be, in any such letter.
(d) The Issuer and the Company agree that the Issuer will
in the Indenture authorize and direct the Trustee to accept and
agree to conditions and provisions of any Letter of Credit or any
other Credit Facility which may be provided in accordance with
the provisions of this Section 4.5.
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SECTION . PAYMENT OF THE BONDS AND OTHER AMOUNTS.
The Bonds and interest and premium, if any, thereon shall be
payable solely from (i) payments made by the Company to the
Trustee under Section 4.2(a) hereof, (ii) amounts realized under
any Letter of Credit or Credit Facility then in effect and
(iii) other moneys on deposit in the Bond Fund and available
therefor.
Payments of principal of, and premium, if any, or interest
on, the Bonds with moneys in the Bond Fund or the Construction
Fund constituting proceeds from the sale of the Bonds or earnings
on investments made under the provisions of the Indenture shall
be credited against the obligation to pay required by
Section 4.2(a) hereof, and the obligation to pay required by
Section 4.2(a) hereof shall be deemed to be satisfied and
discharged to the extent of the corresponding payment made to the
Trustee under any Letter of Credit or Credit Facility then in
effect.
Whenever any Bonds are redeemable in whole or in part at the
option of the Company, the Trustee, on behalf of the Issuer,
shall redeem the same upon the request of the Company and such
redemption (unless conditional) shall be made from payments made
by the Company to the Trustee under Section 4.2(a) hereof and
amounts realized under any Letter of Credit or Credit Facility
then in effect equal to the redemption price of such Bonds.
Whenever payment or provision therefor has been made in
respect of the principal of, or premium, if any, or interest on,
all or any portion of the Bonds in accordance with the Indenture
(whether at maturity or upon redemption or acceleration or upon
provision for payment in accordance with Article VIII of the
Indenture), payments shall be deemed paid to the extent such
payment or provision therefor has been made and is considered to
be a payment of principal of, or premium, if any, or interest on,
such Bonds. If such Bonds are thereby deemed paid in full, the
Trustee shall notify the Company and the Issuer that such payment
requirement has been satisfied. Subject to the foregoing, or
unless the Company is entitled to a credit under this Agreement
or the Indenture, all payments shall be in the full amount
required by Section 4.2(a) hereof.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS;
SECTION 5.1. COMPANY TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS UNDER
WHICH EXCEPTIONS PERMITTED. The
Company agrees that during the term of this Agreement, it will
maintain its corporate existence and its good standing in the
State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or
merge into another corporation unless (a) the acquirer of its
assets or the corporation with which it shall consolidate or into
which it shall merge shall (i) be a corporation organized under
the laws of one of the states of the United States of America,
(ii) be qualified to do business in the State, and (iii) assume
in writing all of the obligations of the Company under this
Agreement and the Tax Agreement.
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SECTION 5.2. ANNUAL STATEMENT. The Company agrees to have
an annual audit made by its regular independent certified
public accountants and to furnish the Trustee (within 30 days
after receipt by the Company) with a balance sheet and statement
of income and surplus showing the financial condition of the
Company and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of
the Company and its consolidated subsidiaries, if any, for
each fiscal year, accompanied by a report of said
accountants that such statements have been prepared in
accordance with generally accepted accounting principles.
The Company's obligations under this Section 5.2 may be satisfied
by delivering a copy of the Company's Annual Report to the
Trustee at the same time that it is mailed to
stockholders.
SECTION 5.3. MAINTENANCE AND REPAIR; INSURANCE; TAXES; ETC.
The Company shall maintain or cause to be maintained the
Project in good repair and keep it properly insured and shall
promptly pay or cause to be paid all costs thereof. The Company
shall promptly pay or cause to be paid all installments of taxes,
installments of special assessments, and all governmental,
utility and other charges with respect to the Project, when due.
The Company may, at its own expense and in its own name in good
faith contest or appeal any such taxes, assessments or other
charges, or installments thereof, but shall not permit any such
taxes, assessments or other charges, or installments thereof, to
remain unpaid if such nonpayment shall subject the Project or any
part thereof to loss or forfeiture.
SECTION 5.4. RECORDATION AND OTHER INSTRUMENTS.
The Company shall cause such security agreements, financing
statements and all supplements thereto and other instruments as
may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may be required by law
in order to fully preserve, protect and perfect the security of
the Owners of the Bonds and the rights of the Trustee and, after
payment in full of the Bonds as provided in the Indenture, the
rights of the Bank provided in the Indenture, and to perfect the
security interest created by the Indenture. The Company agrees
to abide by the provisions of Section 5.04 of the Indenture to
the extent applicable to the Company.
SECTION 5.5. NO WARRANTY BY THE ISSUER. The Issuer makes no
warranty, either express or implied, as to the Project or that it
will be suitable for the purposes of the Company or needs of the
Company.
SECTION 5.6. AGREEMENT AS TO OWNERSHIP AND USE OF THE PROJECT.
The Issuer and the Company agree that title to the
Project shall be in and remain in the Company, and that the
Project shall be the sole property of the Company in which the
Issuer shall have no interest.
SECTION 5.7. COMPANY TO FURNISH NOTICE OF ADJUSTMENTS OF INTEREST RATE
PERIODS. The Company is hereby
granted the option to designate from time to time changes in Rate
Periods (and to rescind such changes) in the manner and to the
extent set forth in Section 2.03 of the Indenture. In the event
the Company elects to exercise any such option, the Company
agrees that it shall cause notices of adjustments of Rate Periods
(or rescissions thereof) to be given to the Issuer, the Trustee
and the Remarketing Agent in accordance with Section 2.03(a),
(b), (c), (d) or (f) of the Indenture.
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SECTION 5.8. INFORMATION REPORTING, ETC. The Issuer
covenants and agrees that, upon the direction of the Company or
Bond Counsel, it will mail or cause to be mailed to the Secretary
of the Treasury (or his designee as prescribed by regulation,
currently the Internal Revenue Service Center, Philadelphia, PA
19255) a statement setting forth the information required by
Section 149(e) of the Code, which statement shall be in the form
of the Information Return for Tax-Exempt Private Activity Bond
Issues (Form 8038) of the Internal Revenue Service (or any
successor form) and which shall be completed by the Company and
Bond Counsel based in part upon information supplied by the Company
and Bond Counsel.
SECTION 5.9. LIMITED LIABILITY OF ISSUER. Any obligation or
liability of the Issuer created by or arising out of this
Agreement or otherwise incurred in connection with the issuance of
the Bonds (including without limitation any liability created by or
arising out of the representations, warranties or covenants set
forth herein or otherwise) shall not impose a debt or
pecuniary liability upon the Issuer or the State or any political
subdivision thereof, or a charge upon the general credit or
taxing powers of any of the foregoing, but shall be payable
solely out of the Revenues or other amounts payable by the
Company to the Issuer hereunder or otherwise.
Neither the issuance of the Bonds nor the delivery of this
Agreement shall, directly or indirectly or contingently, obligate
the Issuer or the State or any political subdivision thereof to
levy any form of taxation therefor or to make any appropriation
for their payment. Nothing in the Bonds or in the Indenture or
this Agreement or the proceedings of the Issuer authorizing the
Bonds or in the Act or in any other related document shall be
construed to authorize the Issuer to create a debt of the Issuer
or the State or any political subdivision thereof within the
meaning of any constitutional or statutory provision of the
State. The principal of, and premium, if any, and interest on,
the Bonds shall be payable solely from the funds pledged for
their payment in accordance with the Indenture and available
therefor under this Agreement and under any Letter of Credit or
Credit Facility then in effect. Neither the State nor any
political subdivision thereof shall in any event be liable for
the payment of the principal of, premium, if any, or interest on,
the Bonds or for the performance of any pledge, obligation or
agreement of any kind whatsoever which may be undertaken by the
Issuer. No breach of any such pledge, obligation or agreement
may impose any pecuniary liability upon the Issuer or the State
or any political subdivision thereof, or any charge upon the
general credit or against the taxing power of Coconino County,
Arizona or the State or any political subdivision thereof. The
Issuer has no taxing power.
SECTION 5.10. INSPECTION OF PROJECT. The Company agrees that
the Issuer and the Trustee and their duly authorized
representatives shall have the right at all reasonable times to
enter upon and examine and inspect the Project property and
shall also be permitted, at all reasonable times, to examine the
books and records of the Company insofar as they relate to the
Project.
SECTION 5.11. PURCHASES OF BONDS BY COMPANY OR ISSUER PROHIBITED;
EXCEPTIONS. At any time while a Letter of Credit
is in effect, the Company shall not and shall not allow any
Insider of the Company to purchase any Bonds except (a) with
Available Moneys or (b) as provided in Section 4.2(b) hereof. At
any time while a Letter of Credit is
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in effect, the Issuer shall not and shall not allow any Insider of
the Issuer to purchase any Bonds except with Available Moneys.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES;
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following
shall be "events of default" under this Agreement and the terms
"event of default" or "default" shall mean, whenever they are
used in this Agreement, any one or more of the following events:
(a) Failure by the Company to pay when due any amounts
required to be paid under Section 4.2(a) hereof, which
failure results in an event of default under subparagraph
(a) or (b) of Section 9.01 of the Indenture; or
(b) Failure by the Company to pay or cause to be paid
any payment required to be paid under Section 4.2(b) hereof,
which failure results in an event of default under
subparagraph (c) of Section 9.01 of the Indenture; or
(c) Failure by the Company to observe and perform any
covenant, condition or agreement on its part to be observed
or performed in this Agreement, other than as referred to in
(a) and (b) above, for a period of 90 days after written
notice, or in the case of failure by the Company to observe
and perform any covenant, condition or agreement on its part
to be observed or performed in Section 4.2(h) hereof, for a
period of 30 days after written notice, specifying such
failure and requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder, given to the
Company by the Trustee or to the Company and the Trustee by
the Issuer, unless the Issuer and the Trustee shall agree in
writing to an extension of such time prior to its
expiration; provided, however, if the failure stated in the
notice cannot be corrected within the applicable period, the
Issuer and the Trustee will not unreasonably withhold their
consent to an extension of such time if corrective action is
instituted within the applicable period and diligently
pursued until the failure is corrected and such corrective
action or diligent pursuit is evidenced to the Trustee by a
certificate of an Authorized Company Representative; or
(d) A proceeding or case shall be commenced, without
the application or consent of the Company, in any court of
competent jurisdiction seeking (i) liquidation,
reorganization, dissolution, winding-up or composition or
adjustment of debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Company
or of all or any substantial part of its assets, or (iii)
similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or
adjustment of debts, and such proceeding or cause shall
continue undismissed, or an order, judgment, or decree
approving or ordering any of the foregoing shall be entered
and shall continue in effect for a period of 90 days; or an
order for relief against the Company shall be entered
against the Company in an involuntary case under the
Bankruptcy Code (as now or hereafter in effect) or other
applicable law; or
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(e) The Company shall admit in writing its inability
to pay its debts generally as they become due or shall file
a petition in voluntary bankruptcy or shall make any general
assignment for the benefit of its creditors, or shall
consent to the appointment of a receiver or trustee of all
or substantially all of its property, or shall commence a
voluntary case under the Bankruptcy Code (as now or
hereafter in effect), or shall file in any court of
competent jurisdiction a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of
debts, or shall fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under such
Bankruptcy Code or other applicable law; or
(f) Dissolution or liquidation of the Company;
provided that the term "dissolution or liquidation of the
Company" shall not be construed to include the cessation of
the corporate existence of the Company resulting either from
a merger or consolidation of the Company into or with
another corporation or a dissolution or liquidation of the
Company following a transfer of all or substantially all of
its assets as an entirety, under the conditions permitting
such actions contained in Section 5.1 hereof; or
(g) The occurrence of an "event of default" under the
Indenture.
The foregoing provisions of Section 6.1(c) are subject to
the following limitations: If by reason of Force Majeure the
Company is unable in whole or in part to carry out its agreements
on its part herein contained, other than the obligations on the
part of the Company contained in Article IV and Sections 5.3 and
6.4 hereof, the Company shall not be deemed in default during the
continuance of such inability. The Company agrees, however, to
remedy with all reasonable dispatch the cause or causes
preventing the Company from carrying out its agreements; provided
that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the
Company and the Company shall not be required to make settlement
of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when
such course is in the sole judgment of the Company unfavorable to
the Company.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any event of
default referred to in Section 6.1 hereof shall have happened
and be continuing, the Trustee, as assignee of the Issuer:
(a) shall, by notice in writing to the Company,
declare the unpaid indebtedness under Section 4.2(a) hereof
to be due and payable immediately, if concurrently with or
prior to such notice the unpaid principal amount of the
Bonds shall have been declared to be due and payable, and
upon any such declaration the same (being an amount
sufficient, together with other moneys available therefor in
the Bond Fund, to pay the unpaid principal of, premium, if
any, and interest accrued on, the Bonds) shall become and
shall be immediately due and payable as liquidated damages;
and
(b) may take whatever action at law or in equity as
may appear necessary or desirable to collect the payments
and other amounts then due and thereafter to become
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due hereunder or to enforce performance and observance of any
obligation, agreement or covenant of the Company under this
Agreement.
Any amounts collected pursuant to action taken under this
Section 6.2 shall be paid into the Bond Fund (unless otherwise
provided in this Agreement) and applied in accordance with the
provisions of the Indenture. No action taken pursuant to this
Section 6.2 shall relieve the Company from the Company's
obligations pursuant to Section 4.2 hereof.
No recourse shall be had for any claim based on this
Agreement against any officer, director or stockholder, past,
present or future, of the Company as such, either directly or
through the Company, under any constitutional provision, statute
or rule of law, or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise.
Nothing herein contained shall be construed to prevent the
Issuer from enforcing directly any of its rights under the second
paragraph of Section 3.1 hereof and under Sections 4.2(e),
4.2(g), 5.3 and 6.4 hereof.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein
conferred upon or reserved to the Issuer is intended to be
exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement 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 and power may be exercised from time
to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy reserved
to it in this Article, it shall not be necessary to give any
notice, other than such notice as may be herein expressly
required. Subject to the provisions of the Indenture and hereof,
such rights and remedies as are given the Issuer hereunder shall
also extend to the Trustee. The Owners of the Bonds, subject
to the provisions of the Indenture, shall be entitled to the
benefit of all covenants and agreements herein contained.
SECTION 6.4. AGREEMENT TO PAY FEES AND EXPENSES OF COUNSEL.
In the event the Company should default under any of
the provisions of this Agreement and the Issuer or the Trustee
should employ Counsel or incur other expenses for the collection
of the indebtedness hereunder or the enforcement of performance
or observance of any obligation or agreement on the part of the
Company herein contained, the Company agrees that it will on
demand therefor pay to the Trustee, the Issuer or, if so directed
by the Issuer, to the Counsel for the Issuer, the reasonable fees
of such Counsel and such other expenses so incurred by or on
behalf of the Issuer or the Trustee.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO
WAIVERS. In the event any agreement contained in
this Agreement should be breached by either party and thereafter
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. No waiver shall be effective unless in
writing and signed by the party making the waiver. The Issuer
shall have no power to waive any default hereunder by the Company
without both the consent of the Trustee and the Bank to such
waiver. The Trustee and the Bank shall have the
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power to waive any default by the Company hereunder, except a
default under the second paragraph of Section 3.1 hereof, or
under Section 3.6, 4.2(e), 4.2(g), 5.3 or 6.4 hereof, in so far
as it pertains to the Issuer, without the prior written
concurrence of the Issuer. Notwithstanding the foregoing, if,
after the acceleration of the maturity of the outstanding Bonds
by the Trustee pursuant to Section 9.02 of the Indenture, (i)
all arrears of principal of and interest on the outstanding
Bonds and interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at the
rate of interest borne by the Bonds on the date on which such
principal or interest became due and payable and the premium,
if any, on all Bonds then Outstanding which have become due
and payable otherwise than by acceleration, and all other sums
payable under the Indenture, except the principal of and the
interest on such Bonds which by such acceleration shall have
become due and payable, shall have been paid, (ii) all other
things shall have been performed in respect of which there was a
default, (iii) there shall have been paid the reasonable fees and
expenses of the Trustee and of the Owners of such Bonds,
including reasonable attorneys' fees paid or incurred and (iv)
such event of default under the Indenture shall be waived in
accordance with Section 9.09 of the Indenture with the consequence
that such acceleration under Section 9.02 of the Indenture is
rescinded, then the Company's default hereunder shall be deemed
to have been waived and its consequences rescinded and no
further action or consent by the Trustee or the Issuer or the Bank
shall be required; provided that there has been furnished an
opinion of Bond Counsel to the effect that such waiver will not
adversely affect the exemption from federal income taxes of
interest on the Bonds.
ARTICLE VII
OPTIONS AND OBLIGATIONS OF COMPANY;
PREPAYMENTS; REDEMPTION OF BONDS
SECTION 7.1. OPTION TO PREPAY. The Company shall have, and
is hereby granted, the option to prepay the payments due
hereunder in whole or in part at any time or from time to time
(a) to provide for the redemption of Bonds pursuant to the
provisions of Section 3.01(A) of the Indenture or (b) to provide
for the defeasance of the Bonds pursuant to Article VIII of
the Indenture. In the event the Company elects to provide for
the redemption of Bonds as permitted by this Section, the
Company shall notify and instruct the Trustee in accordance with
Section 7.3 hereof to redeem all or any portion of the Bonds in
advance of maturity. If the Company so elects, any
redemption of Bonds pursuant to Section 3.01(A) of the
Indenture may be made conditional.
SECTION 7.2. OBLIGATION TO PREPAY. The Company covenants and
agrees that if all or any part of the Bonds are unconditionally
called for redemption in accordance with the Indenture or become
subject to mandatory redemption, it will prepay the indebtedness
hereunder in whole or in part, prior to the date on which notice
of such redemption is given to the owners of such Bonds, in an
amount sufficient to redeem such Bonds on the date fixed for
the redemption of the Bonds.
SECTION 7.3. NOTICE OF PREPAYMENT. Upon the exercise of
the option granted to the Company in Section 7.1 hereof, or
upon the Company having knowledge of the
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occurrence of any event requiring mandatory
redemption of the Bonds in accordance with Section 3.01(B) of the
Indenture, the Company shall give written notice to the Issuer,
the Bank, the Remarketing Agent and the Trustee. The notice
shall provide for the date of the application of the prepayment
made by the Company hereunder to the retirement of the Bonds in
whole or in part pursuant to call for redemption and shall be
given by the Company not less than 45 days prior to the date of
the redemption which is to occur as a result of such prepayment
(or such later date as is acceptable to the Trustee and the
Issuer), and in the case of a redemption of Bonds pursuant to
Section 3.01(B) of the Indenture shall be given on a date which
will permit the redemption of the Bonds within the time required
by Section 3.01(B) of the Indenture. On the date fixed for
redemption of the Bonds or portions thereof, there shall be
deposited with the Trustee from drawings upon any Letter of
Credit then in effect or payments by the Company or from amounts
realized under any Credit Facility then in effect as required by
Section 7.1 or 7.2, as appropriate, for payment into the Bond
Fund. Any other provision of this Agreement or the Indenture to
the contrary notwithstanding, any prepayment of moneys hereunder
shall be made in such manner and at such time that any redemption
of Bonds or portions thereof will be made with Available Moneys.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as
otherwise provided herein, all notices, certificates or other
communications hereunder shall be sufficiently given if in
writing and shall be deemed given when mailed by first class
mail, postage prepaid, or by qualified overnight courier service,
courier charges prepaid, or by facsimile (receipt of which is
orally confirmed) addressed as follows: If to the Issuer, at c/o
Mangum, Wall, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or to telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
if to the Company, at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (89102 for Federal Express), or to telecopy
number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Treasurer; if to the Trustee,
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or to
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration; if to the Remarketing Agent, at the address
specified by the Remarketing Agent; and if to the Bank, at the
address specified by the Bank. In case by reason of the
suspension of regular mail service, it shall be impracticable to
give notice by first class mail of any event to the Issuer, to
the Company, to the Remarketing Agent or to the Bank when such
notice is required to be given pursuant to any provisions of this
Agreement, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be sufficient
giving of such notice. The Issuer, the Company, the Trustee, the
Remarketing Agent and the Bank may, by notice pursuant to this
Section 8.1, designate any different addresses to which
subsequent notices, certificates or other communications shall be
sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be
assigned by either party without consent of the other and the
Bank, except that the Issuer shall assign to the Trustee its
rights under this Agreement (except under the second
paragraph of Section 3.1 and under Sections 4.2(e), 4.2(g),
5.3, and 6.4 hereof) as provided by Section 4.4 hereof, and the
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Company may assign its rights under this Agreement to any
transferee or any surviving or resulting corporation as provided
by Section 5.1 hereof.
SECTION 8.3. SEVERABILITY. If any provision of this
Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render
the same invalid, inoperative, or unenforceable to any
extent whatever.
SECTION 8.4. EXECUTION OF COUNTERPARTS. This Agreement may
be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute
but one and the same instrument.
SECTION 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties hereto that after payment in full of (i) the Bonds (or
provision for payment thereof having been made in accordance
with the provisions of the Indenture), (ii) the fees, charges and
expenses of the Trustee in accordance with the Indenture,
(iii) the Administrative Expenses, (iv) the fees and expenses
of the Remarketing Agent and the Issuer and (v) all other
amounts required to be paid under this Agreement and the
Indenture, any amounts remaining in the Bond Fund shall belong to
and be paid to the Company by the Trustee; provided, however,
that if there remain reimbursement or other obligations of the
Company under any Reimbursement Agreement, such moneys remaining
in the Bond Fund shall, subject to Section 13.10(b) of the
Indenture, be paid by the Trustee to the Bank upon written
direction of the Bank to such extent.
SECTION 8.6. AMENDMENTS, CHANGES AND MODIFICATIONS. This
Agreement may be amended, changed, modified, altered or
terminated only by written instrument executed by the Issuer
and the Company, and only if the written consent of the Trustee and
the Bank thereto is obtained. Subject to the written consent of
the Trustee and the Bank, the Issuer and the Company agree to
enter into such amendments, changes and modifications to this
Agreement (i) as may be required by the provisions of this
Agreement or the Indenture, (ii) for the purpose of curing
any ambiguity, formal defect or omission in this Agreement,
(iii) so as to add additional rights acquired in accordance with
the provisions of this Agreement, (iv) to preserve the
exemption from federal income taxes of interest on the Bonds, or
any of them, or (v) to qualify the Bonds for an appropriate
rating by ▇▇▇▇▇'▇ or S&P or Fitch, as the case may be, or to
maintain any such rating, or (vi) in connection with any other
change herein which is not to the prejudice of the Trustee, the
Bank or the Owners of the Bonds; provided, however, that the
Issuer shall not thereby incur any monetary obligation
or liability (except only to the extent that the same shall be
payable solely and only out of funds provided or to be provided
by the Company) or surrender or abdicate in whole or in part any
of its essential governmental functions or powers or any of its
discretion in exercising the same.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws
of the State.
SECTION 8.8. AUTHORIZED ISSUER AND COMPANY REPRESENTATIVES.
Whenever under the provisions of this Agreement the approval of the
Issuer or the Company is required to take some action at the
request of the other, such approval of such request shall be given
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for the Issuer by the Authorized Issuer Representative and for
the Company by the Authorized Company Representative, and the
other party hereto and the Trustee shall be authorized to act
on any such approval or request and neither party hereto shall
have any complaint against the other or against the Trustee as a
result of any such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. This Agreement shall be
in full force and effect from its date to and including such
date as all of the Bonds issued under the Indenture shall have
been fully paid or retired (or provision for such payment shall
have been made as provided in the Indenture), provided that all
representations and certifications by the Company as to all
matters affecting the tax-exempt status of the Bonds and the
covenants of the Company in Sections 4.2(c), 4.2(d), 4.2(e),
4.2(f), 4.2(g) and 4.2(h) hereof shall survive the termination of
this Agreement.
SECTION 8.10. CANCELLATION AT EXPIRATION OF TERM. At
the acceleration, termination or expiration of the term of this
Agreement and following full payment of the Bonds or provision
for payment thereof and of all other fees and charges having been
made in accordance with the provisions of this Agreement and the
Indenture, the Issuer shall deliver to the Company any documents
and take or cause the Trustee to take such actions as may be
necessary to effectuate the cancellation and evidence the
termination of this Agreement.
SECTION 8.11. REFERENCES TO BANK AND PROVIDER.
At any time that a Letter of Credit (and if at such time there
shall be no Pledged Bonds) or any Credit Facility is not in
effect and the Bank shall have been paid all amounts owed them
under the Reimbursement Agreement (as evidenced by a written
certificate of the Bank delivered to the Trustee to such effect),
all references herein to the Bank or the Provider, as the case
may be, shall be deemed ineffective. Any provisions hereof
requiring the consent of the Bank or the Provider shall be deemed
ineffective if the Bank or the Provider is at any such time in
default in its obligations under the Letter of Credit or Credit
Facility, as the case may be, to fund a drawing thereunder made
in strict compliance with the terms of such Letter of Credit or
Credit Facility.
SECTION 8.12. SPECIFIC REQUEST FOR RATINGS REQUIRED. No
reference herein to ▇▇▇▇▇'▇ or S&P or Fitch shall
be construed by any such rating agency as a request or permission
to issue a rating on the Bonds. Any rating on the Bonds shall be
issued by any rating agency only pursuant to specific written
request therefor from the Company.
SECTION 8.13. NOTICE REGARDING CANCELLATION OF CONTRACTS.
As required by
the provisions of Section 38-511,
Arizona Revised Statutes, as amended, notice is hereby given that
political subdivisions of the State of Arizona or any of their
departments or agencies may, within three (3) years of its
execution, cancel any contract, without penalty or further
obligation, made by the political subdivisions or any of their
departments or agencies on or after September 30, 1988, if any
person significantly involved in initiating, negotiating,
securing, drafting or creating the contract on behalf of the
political subdivisions or any of their departments or agencies
is, at any time while the contract or any extension of the
contract is in effect, an employee or agent of any other party to
the contract in any capacity or a consultant to any other party
of the contract with respect to the subject matter of the
contract. The cancellation shall be effective when written
notice from the chief executive
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officer or governing body of the political subdivision is received
by all other parties to the contract unless the notice specifies
a later time.
The Trustee covenants and agrees not to employ as an
employee, agent or, with respect to the subject matter of this
Agreement, a consultant, any person significantly involved in
initiating, negotiating, securing, drafting or creating this
Agreement on behalf of the Issuer within three (3) years from the
execution hereof, unless a waiver is provided by the Issuer.
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IN WITNESS WHEREOF, the Issuer and the Company have caused
this Agreement to be executed in their respective corporate names
and their respective corporate seals to be hereunto affixed and
attested by their duly authorized officers, all as of the date
first above written..c.:::Signatures;
COCONINO COUNTY, ARIZONA POLLUTION
CONTROL CORPORATION
▇▇▇▇▇▇ ▇. ▇▇▇
By ----------------------------
President
Board of Directors
(SEAL)
Attest:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
____________________________________
Secretary
NEVADA POWER COMPANY
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By ---------------------------------
Vice President, Finance and Planning,
Treasurer, Chief Financial Officer
(SEAL)
Attest:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
____________________________________
Secretary
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EXHIBIT A
(Attached to Financing Agreement between Coconino County, Arizona
Pollution Control Corporation and Nevada Power Company, dated as
of November 1, 1997).
The Project consists of the undivided interest of Nevada
Power Company in the flue gas desulfurization system, including
functionally related and subordinate facilities, being installed
for the removal of sulfur dioxide from combustion gases prior to
discharge into the atmosphere, at the Navajo Generation Station
owned by Nevada Power Company and others and located in Coconino
County, Arizona.
