LOAN AGREEMENT 2008 SERIES A BETWEEN THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF PIMA AND TUCSON ELECTRIC POWER COMPANY DATED AS OF MARCH 1, 2008 RELATING TO INDUSTRIAL DEVELOPMENT REVENUE BONDS, 2008 SERIES A (TUCSON ELECTRIC POWER COMPANY...
Exhibit
4(b)
2008
SERIES A
BETWEEN
THE
INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE
COUNTY OF PIMA
AND
TUCSON
ELECTRIC POWER COMPANY
--------
DATED AS
OF MARCH 1, 2008
________
RELATING
TO
INDUSTRIAL
DEVELOPMENT REVENUE BONDS,
2008
SERIES A
(TUCSON
ELECTRIC POWER COMPANY PROJECT)
TABLE OF
CONTENTS*
Page
|
ARTICLE
I
DEFINITIONS
|
||
|
SECTION
1.01.
|
Definitions
|
2
|
|
SECTION
1.02.
|
Incorporation
of Certain Definitions by Reference
|
5
|
|
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
|
||
|
SECTION
2.01.
|
Representations
and Warranties of the Authority
|
5
|
|
SECTION
2.02.
|
Representations
and Warranties of the Company
|
6
|
|
ARTICLE
III
THE
FACILITIES
|
||
|
SECTION
3.01.
|
Facilities;
Property of the Company
|
7
|
|
SECTION
3.02.
|
Maintenance
of Facilities; Remodeling
|
7
|
|
SECTION
3.03.
|
Insurance
|
7
|
|
SECTION
3.04.
|
Condemnation
|
7
|
|
ARTICLE
IV
ISSUANCE
OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS OF THE
BONDS
|
||
|
SECTION
4.01.
|
Issuance
of the Bonds
|
7
|
|
SECTION
4.02.
|
Issuance
of Other Obligations
|
7
|
|
SECTION
4.03.
|
The
Loan; Disposition of Bond Proceeds
|
8
|
|
SECTION
4.04.
|
Investment
of Moneys in Funds and Accounts
|
8
|
|
ARTICLE
V
LOAN
PAYMENTS; OTHER OBLIGATIONS
|
||
|
SECTION
5.01.
|
Loan
Payments
|
8
|
|
SECTION
5.02.
|
Payments
Assigned; Obligation Absolute
|
8
|
|
SECTION
5.03.
|
Payment
of Expenses
|
9
|
|
SECTION
5.04.
|
Indemnification
|
9
|
|
SECTION
5.05.
|
Payment
of Taxes; Discharge of Liens
|
10
|
* This table of contents is not part of the Loan
Agreement, and is for convenience only. The captions herein are of no
legal effect and do not vary the meaning or legal effect of any part of the Loan
Agreement.
i
|
ARTICLE
VI
SPECIAL
COVENANTS
|
||
|
SECTION
6.01.
|
Maintenance
of Legal Existence
|
10
|
|
SECTION
6.02.
|
Permits
or Licenses
|
11
|
|
SECTION
6.03.
|
Authority’s
Access to Facilities
|
11
|
|
SECTION
6.04.
|
Tax-Exempt
Status of Interest on Bonds
|
11
|
|
SECTION
6.05.
|
Use
of Facilities
|
12
|
|
SECTION
6.06.
|
Financing
Statements
|
12
|
|
ARTICLE
VII
ASSIGNMENT,
LEASING AND SELLING
|
||
|
SECTION
7.01.
|
Conditions
|
13
|
|
SECTION
7.02.
|
Instrument
Furnished to the Authority and Trustee
|
15
|
|
SECTION
7.03.
|
Limitation
|
15
|
|
ARTICLE
VIII
EVENTS
OF DEFAULT AND REMEDIES
|
||
|
SECTION
8.01.
|
Events
of Default
|
15
|
|
SECTION
8.02.
|
Force
Majeure
|
16
|
|
SECTION
8.03.
|
Remedies
|
16
|
|
SECTION
8.04.
|
No
Remedy Exclusive
|
17
|
|
SECTION
8.05.
|
Reimbursement
of Attorneys’ and Agents’ Fees
|
17
|
|
SECTION
8.06.
|
Waiver
of Breach
|
17
|
|
ARTICLE
IX
REDEMPTION
OF BONDS
|
||
|
SECTION
9.01.
|
Redemption
of Bonds
|
17
|
|
SECTION
9.02.
|
Compliance
with the Indenture
|
18
|
|
ARTICLE
X
MISCELLANEOUS
|
||
|
SECTION
10.01.
|
Term
of Agreement
|
18
|
|
SECTION
10.02.
|
Notices
|
18
|
|
SECTION
10.03.
|
Parties
in Interest
|
18
|
|
SECTION
10.04.
|
Amendments
|
18
|
|
SECTION
10.05.
|
Counterparts
|
19
|
|
SECTION
10.06.
|
Severability
|
19
|
|
SECTION
10.07.
|
Governing
Law
|
19
|
|
SECTION
10.08.
|
Notice
Regarding Cancellation of Contracts
|
19
|
ii
|
Exhibit
A - Description of the Facilities
|
A-1
|
iii
THIS LOAN
AGREEMENT (2008 Series A), dated as of March 1, 2008 (this “Agreement”), between
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF PIMA, an Arizona nonprofit
corporation designated by law as a political subdivision of the State of Arizona
(hereinafter called the “Authority”), and TUCSON ELECTRIC POWER COMPANY, a
corporation organized and existing under the laws of the State of Arizona
(hereinafter called the “Company”),
W I T N E
S S E T H:
WHEREAS,
the Authority is authorized and empowered under Title 35, Chapter 5, Arizona
Revised Statutes, as amended (the “Act”), to issue its bonds in accordance with
the Act and to make secured or unsecured loans for the purpose of financing or
refinancing the acquisition, construction, improvement or equipping of projects
consisting of land, any building or other improvement, and all real and personal
properties, including but not limited to machinery and equipment, whether or not
now in existence or under construction, whether located within or without the
State of Arizona or Pima County, which shall be suitable for, among other
things, facilities for the furnishing of electric energy, gas or water, air and
water pollution control facilities and sewage and solid waste disposal
facilities, and to charge and collect interest on such loans and pledge the
proceeds of loan agreements as security for the payment of the principal of and
interest on bonds, or designated issues of bonds, issued by the Authority and
any agreements made in connection therewith, whenever the Board of Directors of
the Authority finds such loans to further advance the interest of the Authority
or the public and in the public interest;
WHEREAS,
the Authority has heretofore issued and sold $150,000,000 aggregate principal
amount of The Industrial Development Authority of the County of Pima Industrial
Development Revenue Bonds, 1997 Series B (Tucson Electric Power Company Project)
of which $146,415,000 in principal amount remain outstanding (the “1997 Series B
Bonds”), the proceeds of which were loaned to the Company to refinance, by the
payment or redemption of The Industrial Development Authority of the County of
Pima Industrial Development Revenue Bonds, 1982 Series A (Tucson Electric Power
Company General Project (the “1982 Bonds due June 15, 2022”), and The Industrial
Development Authority of the County of Pima Industrial Development Revenue
Bonds, 1982 Series A (Tucson Electric Power Company General Project) (the “1982
Bonds due July 1, 2022” and, together with the 1982 Bonds due June 15, 2022, the
“1982 Bonds”), or provision therefor, the portion of the costs of the
acquisition, construction, improvement and equipping of certain of its
facilities for the furnishing of electric energy described in Exhibit A hereto
(the “Facilities”) paid from the proceeds of the 1982 Bonds;
WHEREAS,
the Authority has heretofore issued and sold $75,000,000 aggregate principal
amount of The Industrial Development Authority of the County of Pima Industrial
Development Revenue Bonds, 1997 Series C (Tucson Electric Power Company Project)
of which $74,330,000 in principal amount remain outstanding (the “1997 Series C
Bonds”), the proceeds of which were loaned to the Company to refinance, by the
payment or redemption of The Industrial Development Authority of the County of
Pima Industrial Development Revenue Bonds, 1983 Series A Bonds (Tucson Electric
Power Company General Project) (the “1983
Bonds”),
or provision therefor, the portion of the costs of the acquisition,
construction, improvement and equipping of the Facilities paid from the proceeds
of the 1983 Bonds; and
WHEREAS,
the Authority proposes to issue and sell its revenue bonds for the purpose of
refinancing a portion of the costs of the Facilities previously refinanced from
the proceeds of the 1997 Series B Bonds and the 1997 Series C Bonds, by the
redemption of $16,415,000 aggregate principal amount of the 1997 Series B Bonds
and all outstanding 1997 Series C Bonds (such portion of the 1997 Series B Bonds
and all of the 1997 Series C Bonds being hereinafter referred to as the “1997
Bonds”);
NOW,
THEREFORE, the parties hereto, intending to be legally bound hereby and in
consideration of the premises, DO HEREBY AGREE as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions. The
terms defined in this Article I shall for all purposes of this Agreement have
the meanings herein specified, unless the context clearly requires
otherwise:
Act:
“Act”
shall mean Title 35, Chapter 5, Arizona Revised Statutes, and all acts
supplemental thereto or amendatory thereof.
Administration
Expenses:
“Administration
Expenses” shall mean the reasonable expenses incurred by the Authority with
respect to this Agreement, the Indenture and any transaction or event
contemplated by this Agreement or the Indenture, including the compensation and
reimbursement of expenses and advances payable to the Trustee, to the paying
agent, any co paying agent and the registrar under the Indenture and a pro rata
share of the Authority’s annual operating expenses in accordance with the
provisions of Section 4.02(c) of The Industrial Development Authority of the
County of Pima Procedural Pamphlet II, as more fully described in the Tax
Agreement.
Agreement:
“Agreement”
shall mean this Loan Agreement, dated as of March 1, 2008, between
the Authority and the Company, and any and all modifications, alterations,
amendments and supplements hereto.
Authority:
“Authority”
shall mean The Industrial Development Authority of the County of Pima, an
Arizona nonprofit corporation designated by law as a political subdivision of
the State of Arizona incorporated for and with the approval of Pima County,
Arizona, pursuant to the provisions of the Constitution of the State of Arizona
and the Act, its successors and their assigns.
2
Authorized
Company Representative:
“Authorized
Company Representative” shall mean each person at the time designated to act on
behalf of the Company by written certificate furnished to the Authority and the
Trustee containing the specimen signature of such person and signed on behalf of
the Company by its President, any Vice President or its Treasurer, together with
its Secretary or any Assistant Secretary.
Bond
Counsel:
“Bond
Counsel” shall mean any firm or firms of nationally recognized bond counsel
experienced in matters pertaining to the validity of, and exclusion from gross
income for federal tax purposes of interest on bonds issued by states and
political subdivisions, selected by the Company and acceptable to the
Authority.
Bond
Fund:
“Bond
Fund” shall mean the fund created by Section 4.01 of the Indenture.
Bonds:
“Bond” or
“Bonds” shall mean The Industrial Development Authority of the County of Pima
Industrial Development Revenue Bonds, 2008 Series A (Tucson Electric Power
Company Project).
Company:
“Company”
shall mean Tucson Electric Power Company, a corporation organized and existing
under the laws of the State of Arizona, its successors and their assigns,
including, without limitation, any successor obligor under Section 6.01 or 7.01
to the extent of the obligations assumed thereunder.
Facilities:
“Facilities”
shall mean the real and personal properties, machinery and equipment currently
existing, under construction and to be constructed which are described in
Exhibit A hereto, as revised from time to time to reflect any changes therein,
additions thereto, substitutions therefor and deletions therefrom permitted by
the terms hereof, subject, however, to the provisions of Section 7.01
hereof.
Indenture:
“Indenture”
shall mean the Indenture of Trust, dated as of March 1, 2008, between the
Authority and the Trustee relating to the Bonds, and any and all modifications,
alterations, amendments and supplements thereto.
3
Loan
Payments:
“Loan
Payments” shall mean the payments required to be made by the Company pursuant to
Section 5.01 hereof.
1954
Code:
“1954
Code” shall mean the Internal Revenue Code of 1954, as amended. Each
reference to a section of the 1954 Code herein shall be deemed to include the
United States Treasury Regulations proposed or in effect thereunder and
applicable to the Bonds or the use of proceeds thereof, unless the context
clearly requires otherwise, as well as future amendments to the 1954
Code.
1986 Code:
“1986 Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time. Each reference to a
section of the 1986 Code herein shall be deemed to include the United States
Treasury Regulations proposed or in effect thereunder and applicable to the
Bonds or the use of proceeds thereof, unless the context clearly requires
otherwise. References to any particular 1986 Code section shall, in the
event of a successor to the 1986 Code, be deemed to be a reference to the
successor to such 1986 Code section.
1997
Bonds:
“1997
Bonds” shall mean, collectively, $16,415,000 of the $146,415,000 aggregate
principal amount of The Industrial Development Authority of the County of Pima
Industrial Development Revenue Bonds, 1997 Series B (Tucson Electric Power
Company Project) which are being redeemed on the date of issuance of the Bonds
and the $74,330,000 aggregate principal amount of The Industrial Development
Authority of the County of Pima Industrial Development Revenue Bonds, 1997
Series C (Tucson Electric Power Company Project) which are being redeemed on the
date of issuance of the Bonds.
Outstanding:
“Outstanding”,
when used in reference to the Bonds, shall mean, as at any particular date, the
aggregate of all Bonds authenticated and delivered under the Indenture
except:
(a)
those canceled by the Trustee at or prior to such date or delivered to or
acquired by the Trustee at or prior to such date for cancellation;
(b)
those deemed to be paid in accordance with Article VIII of the Indenture;
and
(c)
those in lieu of or in exchange or substitution for which other Bonds shall have
been authenticated and delivered pursuant to the Indenture, unless proof
satisfactory to the Trustee and the Company is presented that such Bonds are
held by a bona fide holder in due course.
4
Person:
“Person”
means (i) any corporation, limited liability company, partnership, joint
venture, association, joint stock company, business trust, or unincorporated
organization, in each case formed or organized under the laws of the United
States of America, any state thereof or the District of Columbia, or (ii) the
United States of America or any state thereof, or any political subdivision of
either thereof, or any agency, authority or other instrumentality of any of the
foregoing.
Tax
Agreement:
“Tax
Agreement” shall mean that tax certificate and agreement, dated the date of the
initial authentication and delivery of the Bonds, between the Authority and the
Company, relating to the requirements of the Tax Reform Act of 1986 and the 1954
Code, and any and all modifications, alterations, amendments and supplements
thereto.
Trustee:
“Trustee”
shall mean U.S. Bank Trust National Association, as trustee under the Indenture,
its successors in trust and their assigns.
SECTION
1.02. Incorporation of
Certain Definitions by Reference. Each
capitalized term used herein and not otherwise defined herein shall have the
meaning set forth in the Indenture.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
SECTION
2.01. Representations
and Warranties of the Authority. The
Authority makes the following representations and warranties as the basis for
the undertakings on the part of the Company contained herein:
(a)
The Authority is an Arizona nonprofit corporation designated by law as a
political subdivision of the State of Arizona created and existing under the
Constitution and laws of the State of Arizona;
(b)
The Authority has the power to enter into this Agreement and the Indenture and
to perform and observe the agreements and covenants on its part contained herein
and therein, including without limitation the power to issue and sell the Bonds
as contemplated herein and in the Indenture, and by proper action has duly
authorized the execution and delivery hereof and thereof; and
(c)
The execution and delivery of this Agreement and the Indenture by the Authority
do not, and consummation of the transactions contemplated hereby and fulfillment
of the terms hereof and thereof by the Authority will not, result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Authority
is now a party or by
5
which it
is now bound, or, to the best knowledge of the Authority, any order, rule or
regulation applicable to the Authority of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Authority or over any of its properties, or the Constitution or laws of the
State of Arizona.
SECTION
2.02. Representations
and Warranties of the Company. The
Company makes the following representations and warranties as the basis for the
undertakings on the part of the Authority contained herein:
(a)
The Company is a corporation duly organized and existing in good standing under
the laws of the State of Arizona and duly qualified as a foreign corporation in
the State of New Mexico;
(b)
The Company has power to enter into this Agreement and to perform and observe
the agreements and covenants on its part contained herein and by proper
corporate action has duly authorized the execution and delivery hereof and all
other documents hereby executed by the Company;
(c)
The execution and delivery of this Agreement by the Company do not, and
consummation of transactions contemplated hereby and fulfillment of the terms
hereof by the Company will not, result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company is a party or by
which it is now bound, or the Restated Articles of Incorporation or by laws of
the Company, or any order, rule or regulation applicable to the Company of any
court or of any regulatory body or administrative agency or other governmental
body having jurisdiction over the Company or over any of its properties, or any
statute of any jurisdiction applicable to the Company;
(d)
The Arizona Corporation Commission has approved all matters relating to the
Company’s participation in the transactions contemplated by this Agreement which
require said approval, and no other consent, approval, authorization or other
order of any regulatory body or administrative agency or other governmental body
is legally required for the Company’s participation therein, except such as may
have been obtained or may be required under the securities laws of any
jurisdiction;
(e)
The Facilities are to be used solely for purposes contemplated by the Act and
are located within the State of Arizona and the State of New Mexico;
and
(f)
All of the proceeds of the Bonds will be expended to refinance the Facilities
through the payment or redemption of the 1997 Bonds, or provisions
therefor.
6
ARTICLE
III
THE
FACILITIES
SECTION
3.01. Facilities;
Property of the Company. An
undivided interest in the Facilities shall be the property of the Company and
the Authority shall have no right, title or interest in the
Facilities.
SECTION
3.02. Maintenance of
Facilities; Remodeling. The
Company shall at all times cause the Facilities, and every element and unit
thereof, to be maintained, preserved and kept in thorough repair, working order
and condition and cause all needful and proper repairs and renewals thereto to
be made; provided, however, that the Company may cause the operation of the
Facilities, or any element or unit thereof, to be discontinued if, in the
judgment of the Company, it is no longer advisable to operate the same, or if
the Company intends to sell or dispose of the same and within a reasonable time
shall endeavor to effectuate such sale or disposition.
The
Company may, subject to the provisions of Section 6.05 hereof, at its own
expense remodel the Facilities or make such substitutions, modifications and
improvements to the Facilities from time to time as it, in its discretion, may
deem to be desirable for its uses and purposes, which remodeling, substitutions,
modifications and improvements shall be included under the terms of this
Agreement as part of the Facilities.
SECTION
3.03. Insurance. The
Company shall keep the Facilities insured against fire and other risks to the
extent usually insured against by companies owning and operating similar
property, by reputable insurance companies or, at the Company’s election, with
respect to all or any element or unit of the Facilities, by means of an adequate
insurance fund set aside and maintained by it out of its own earnings or in
conjunction with other companies through an insurance fund, trust or other
agreement or, by means of unfunded self insurance as may be reasonable and
customary by companies owning and operating similar property. All
proceeds of such insurance shall be for the account of the Company.
SECTION
3.04. Condemnation. The
Company shall be entitled to the entire proceeds of any condemnation award or
portion thereof made for damages to or takings of the Facilities or other
property of the Company.
ARTICLE
IV
ISSUANCE
OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS
OF THE
BONDS
SECTION
4.01. Issuance of the
Bonds. The
Authority shall issue the Bonds under and in accordance with the Indenture,
subject to the provisions of the bond purchase agreement among the Authority,
the initial purchaser or purchasers of the Bonds and the Company. The
Company hereby approves the issuance of the Bonds and all terms and conditions
thereof.
SECTION
4.02. Issuance of Other
Obligations. The
Authority and the Company expressly reserve the right to enter into, to the
extent permitted by law, but shall not be obligated
7
to enter
into, an agreement or agreements other than this Agreement with respect to the
issuance by the Authority, under an indenture or indentures other than the
Indenture, of obligations to provide additional funds to pay the cost of
construction of the Facilities or obligations to refund all or any principal
amount of the Bonds, or any combination thereof.
SECTION
4.03. The Loan;
Disposition of Bond Proceeds. The
Authority shall cause the proceeds of the Bonds to be deposited with the trustee
for the 1997 Bonds to be applied to the payment of the 1997 Bonds upon the
redemption thereof.
The
Authority shall establish the Bond Fund with the Trustee in accordance with
Section 4.01 of the Indenture.
SECTION
4.04. Investment of
Moneys in Funds and Accounts. The
Company and the Authority agree that any moneys held in any fund or account
created by the Indenture shall be invested as provided in the
Indenture.
ARTICLE
V
LOAN
PAYMENTS; OTHER OBLIGATIONS
SECTION
5.01. Loan
Payments. In
consideration of the issuance of the Bonds and the disposition of the proceeds
thereof as contemplated in Section 4.03 hereof, the Company shall pay, or cause
to be paid, to the Trustee for the account of the Authority an amount equal to
the aggregate principal amount of the Bonds from time to time Outstanding and,
as interest on its obligation to pay such amount, an amount equal to premium, if
any, and interest on such Bonds, such amounts to be paid in installments due on
the dates, in the amounts and in the manner provided in the Indenture for the
Authority to cause amounts to be deposited in the Bond Fund for the payment of
the principal of and premium, if any, and interest on the Bonds whether at
stated maturity, upon redemption or acceleration or otherwise; provided,
however, that the obligation of the Company to make any such payment hereunder
shall be reduced by the amount of any reduction under the Indenture of the
amount of the corresponding payment required to be made by the Authority
thereunder.
SECTION
5.02. Payments Assigned;
Obligation Absolute. It
is understood and agreed that all Loan Payments are, by the Indenture, to be
pledged by the Authority to the Trustee, and that all rights and interest of the
Authority hereunder (except for the Authority’s rights under Sections 5.03,
5.04, 6.03 and 8.05 hereof and any rights of the Authority to receive notices,
certificates, requests, requisitions and other communications hereunder) are to
be pledged and assigned to the Trustee. The Company assents to such
pledge and assignment and agrees that the obligation of the Company to make the
Loan Payments shall be absolute, irrevocable and unconditional and shall not be
subject to cancellation, termination or abatement, or to any defense other than
payment or to any right of set off, counterclaim or recoupment arising out of
any breach by the Authority or the Trustee or any other party under this
Agreement, the Indenture or otherwise, or out of any obligation or liability at
any time owing to the Company by the Authority, the Trustee or any other party,
and, further, that the Loan Payments and the other payments due hereunder shall
continue to be payable at the times and in the amounts herein and therein
specified, whether or not the Facilities, or any portion thereof, shall have
been completed
8
or shall
have been destroyed by fire or other casualty, or title thereto, or the use
thereof, shall have been taken by the exercise of the power of eminent domain,
and that there shall be no abatement of or diminution in any such payments by
reason thereof, whether or not the Facilities shall be used or useful, whether
or not any applicable laws, regulations or standards shall prevent or prohibit
the use of the Facilities, or for any other reason, all of the foregoing being
subject, however, to the provisions of Sections 6.01 and 7.01
hereof.
SECTION
5.03. Payment of
Expenses. The
Company shall pay all Administration Expenses, including, without limitation,
Administration Expenses incurred at and subsequent to the time the Bonds are
deemed to have been paid in accordance with Article VIII of the
Indenture. The payment of the compensation and the reimbursement of
expenses and advances of the Trustee, of the paying agent, any co paying agent
and the registrar under the Indenture shall be made directly to such
entities.
SECTION
5.04. Indemnification. The
Company releases the Authority, the Trustee, the County of Pima, Arizona and
their directors, officers, employees and agents from, agrees that the Authority,
the Trustee and the County of Pima, Arizona shall not be liable for, and agrees
to indemnify and hold the Authority, the Trustee, the County of Pima, Arizona
and their directors, officers, employees and agents free and harmless from, any
liability (including, without limitation, attorneys’ and other agents’ fees and
expenses) for any loss or damage to property or any injury to or death of any
person that may be occasioned by any cause whatsoever pertaining to the
Facilities, except (i) in the case of the Trustee, as a result of the negligence
or bad faith or willful misconduct of the Trustee or its directors, officers,
employees and agents; and (ii) in the case of the Authority and the County of
Pima, Arizona, as a result of gross negligence or bad faith of the Authority or
the County of Pima, Arizona or their directors, officers, employees and
agents.
The
Company will indemnify and hold the Authority, the Trustee and the County of
Pima, Arizona, free and harmless from any loss, claim, damage, tax, penalty,
liability, disbursement, litigation expenses, attorneys’ and other agents’ fees
and expenses or court costs arising out of, or in any way relating to, the
execution or performance of this Agreement, the issuance or sale of the Bonds,
actions taken under the Indenture or any other cause whatsoever pertaining to
the Facilities, except (i) in the case the Trustee, as a result of the
negligence or bad faith or willful misconduct of the Trustee; and (ii) in the
case of the Authority and the County of Pima, Arizona, as a result of gross
negligence or bad faith of the Authority or the County of Pima,
Arizona.
The
Company will indemnify and hold the Authority and the County of Pima, Arizona
and their directors, officers, employees and agents free and harmless from any
loss, claim, damage, tax, penalty, liability, disbursement, litigation expenses,
attorney’s fees and expenses or court costs arising out of or in any way
relating to any untrue statement or alleged untrue statement of any material
fact or omission or alleged omission to state a material fact necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading in any official statement or other offering material utilized in
connection with the sale of any Bonds.
9
SECTION
5.05. Payment of Taxes;
Discharge of Liens. The
Company shall: (a) pay, or make provision for payment of, all lawful taxes and
assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, levied or assessed by any federal,
state or municipal government or political body upon the Facilities or any part
thereof or upon the Authority with respect to the Loan Payments, when the same
shall become due; and (b) pay or cause to be satisfied and discharged or make
adequate provision to satisfy and discharge, within sixty (60) days after the
same shall accrue, any lien or charge upon the Loan Payments, and all lawful
claims or demands for labor, materials, supplies or other charges which, if
unpaid, might be or become a lien upon such amounts; provided, that, if the
Company shall first notify the Authority and the Trustee of its intention so to
do, the Company may in good faith contest any such lien or charge or claims or
demands in appropriate legal proceedings, and in such event may permit the items
so contested and identified as such by the Company to remain undischarged and
unsatisfied during the period of such contest and any appeal therefrom, unless
the Trustee shall notify the Company in writing that, in the opinion of counsel
to the Trustee, based upon material facts disclosed to the Trustee without any
duty of investigation, by nonpayment of any such items the lien of the Indenture
as to the Loan Payments will be materially endangered, in which event the
Company shall promptly pay and cause to be satisfied and discharged all such
unpaid items. The Authority shall cooperate fully with the Company in
any such contest.
ARTICLE
VI
SPECIAL
COVENANTS
SECTION
6.01. Maintenance of
Legal Existence. Except
as permitted in this Section 6.01, the Company shall maintain its legal
existence, shall not sell, transfer or otherwise dispose of all of its assets,
as or substantially as an entirety, and shall not consolidate with or merge with
or into another entity. The Company may consolidate with or merge
into another entity organized and existing under the laws of the United States
of America, any state thereof or the District of Columbia, or sell, transfer or
otherwise dispose of all of its assets, as or substantially as an entirety, to
any Person, if the surviving or resulting Person (if other than the Company) or
the transferee Person, as the case may be, prior to or simultaneously with such
merger, consolidation, sale, transfer or disposition, assumes, by delivery to
the Trustee and the Authority of an instrument in writing satisfactory in form
to the Trustee, all the obligations of the Company under this Agreement,
including, without limitation, the obligations of the Company under Section 5.01
hereof. Upon such an assumption following any such sale, transfer or
other disposition of assets, the Company shall be released and discharged from
all liability in respect of all obligations under this
Agreement. Notwithstanding the foregoing, in the case of any such
sale, transfer or other disposition of assets, which do not include the
Facilities, the Company shall remain liable in respect of all obligations under
this Agreement other than the obligations under Section 5.01 hereof, and the
transferee shall not be required to assume any obligations hereunder other than
the obligations under Section 5.01 hereof; provided, however, that the
transferee shall be required to assume all such other obligations unless the
Company shall have delivered to the Authority and the Trustee an opinion of Bond
Counsel to the effect that the non-assumption by the transferee of such other
obligations will not impair the validity under the Act of the Bonds and will not
adversely affect the exclusion from gross income for federal tax purposes of
interest on the Bonds.
10
If
consolidation, merger or sale, transfer or other disposition is made as
permitted by this Section 6.01, the provisions of this Section 6.01 shall
continue in full force and effect and no further consolidation, merger or sale
or other transfer shall be made except in compliance with the provisions of this
Section 6.01.
Anything
in this Agreement to the contrary notwithstanding, the sale, transfer or other
disposition by the Company of all of its facilities (a) for the generation of
electric energy, (b) for the transmission of electric energy or (c) for the
distribution of electric energy, in each case considered alone, or all of its
facilities described in clauses (a) and (b), considered together, or all of its
facilities described in clauses (b) and (c), considered together, shall in no
event be deemed to constitute a sale, transfer or other disposition of all the
properties of the Company, as or substantially as an entirety, unless,
immediately following such sale, transfer or other disposition, the Company
shall own no properties in the other such categories of property not so sold,
transferred or otherwise disposed of. The character of particular
facilities shall be determined by reference to the Uniform System of Accounts
prescribed for public utilities and licensees subject to the Federal Power Act,
as amended, to the extent applicable.
SECTION
6.02. Permits or
Licenses. In
the event that it may be necessary for the proper performance of this Agreement
on the part of the Company or the Authority that any application or applications
for any permit or license to do or to perform certain things be made to any
governmental or other agency by the Company or the Authority, the Company and
the Authority each shall, upon the request of either, execute such application
or applications.
SECTION
6.03. Authority’s Access
to Facilities. The
Authority shall have the right, upon appropriate prior notice to the Company, to
have reasonable access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same.
SECTION
6.04. Tax-Exempt Status
of Interest on Bonds. (a)
It is the intention of the parties hereto that interest on the Bonds shall be
and remain tax-exempt, and to that end the covenants and agreements of the
Authority and the Company in this Section 6.04 and the Tax Agreement are for the
benefit of the Owners from time to time of the Bonds.
(b)
Each of the Company and the Authority covenants and agrees for the benefit of
the Owners from time to time of the Bonds that it will not directly or
indirectly use or permit the use of (to the extent within its control) the
proceeds of any of the Bonds or any other funds, or take or omit to take any
action, if and to the extent such use, or the taking or omission to take such
action, would cause any of the Bonds to be “arbitrage bonds” within the meaning
of Section 148 of the 1986 Code or otherwise subject to federal income taxation
by reason of Section 103 of the 1954 Code and Title XIII of the Tax Reform Act
of 1986, as applicable, and any applicable regulations promulgated
thereunder. To such ends, the Authority and the Company will comply
with all requirements of such Section 148 to the extent applicable to the
Bonds. In the event that at any time the Authority or the Company is
of the opinion that for purposes of this Section 6.04(b) it is necessary to
restrict or limit the yield on the investment of any moneys held by the Trustee
under the Indenture, the Authority or the Company shall so notify the Trustee in
writing.
Without
limiting the generality of the foregoing, the Company and the Authority agree
that there shall be paid from time to time all amounts required to be rebated to
the United States
11
of
America pursuant to Section 148(f) of the 1986 Code and any applicable Treasury
Regulations. This covenant shall survive payment in full or
defeasance of the Bonds and the satisfaction and discharge of the
Indenture. The Company specifically covenants to pay or cause to be
paid the Rebate Requirement as defined and described in the Tax
Agreement.
(c)
The Authority certifies and represents that it has not taken, and the Authority
covenants and agrees that it will not take, any action which results in interest
paid on the Bonds being included in gross income of the Owners of the Bonds for
federal tax purposes pursuant to Section 103 of the 1954 Code and Title XIII of
the Tax Reform Act of 1986, as applicable; and the Company certifies and
represents that it has not taken or (to the extent within its control) permitted
to be taken, and the Company covenants and agrees that it will not take or (to
the extent within its control) permit to be taken any action which will cause
the interest on the Bonds to become includable in gross income for federal
income tax purposes; provided, however, that neither the Company nor the
Authority shall be deemed to have violated these covenants if the interest on
any of the Bonds becomes taxable to a person solely because such person is a
“substantial user” of the Facilities or a “related person” within the meaning of
Section 103(b)(13) of the 1954 Code and provided, further, that none of the
covenants and agreements herein contained shall require either the Company or
the Authority to enter an appearance or intervene in any administrative,
legislative or judicial proceeding in connection with any changes in applicable
laws, rules or regulations or in connection with any decisions of any court or
administrative agency or other governmental body affecting the taxation of
interest on the Bonds. The Company acknowledges having read Section
7.08 of the Indenture and agrees to perform all duties imposed on it by such
Section 7.08, by this Section and by the Tax Agreement. Insofar as
Section 7.08 of the Indenture and the Tax Agreement impose duties and
responsibilities on the Company, they are specifically incorporated herein by
reference.
(d)
Notwithstanding any provision of this Section 6.04 and Section 7.08 of the
Indenture, if the Company shall provide to the Authority and the Trustee an
opinion of Bond Counsel to the effect that any specified action required under
this Section 6.04 and Section 7.08 of the Indenture is no longer required or
that some further or different action is required to maintain the tax-exempt
status of interest on the Bonds, the Company, the Trustee and the Authority may
conclusively rely upon such opinion in complying with the requirements of this
Section 6.04, and the covenants hereunder shall be deemed to be modified to that
extent.
SECTION
6.05. Use of
Facilities. So
long as any Bonds are Outstanding and the Facilities are operated by or for the
benefit of the Company, the Company shall cause the Facilities to be used for
purposes contemplated by the Act and in the Tax Agreement.
SECTION
6.06. Financing
Statements. The
Company shall file and record, or cause to be filed and recorded, all financing
statements and continuation statements referred to in Section 7.07 of the
Indenture.
12
ARTICLE
VII
ASSIGNMENT,
LEASING AND SELLING
SECTION
7.01. Conditions. The
Company’s interest in this Agreement may be assigned as a whole or in part, and
its interest in the Facilities may be leased, sold, transferred or otherwise
disposed of by the Company as a whole or in part (whether an interest in a
specific element or unit or an undivided interest), to any Person; provided,
however, that no such assignment, lease, sale, transfer or other disposition (a)
shall relieve the Company from its primary liability for its obligations under
Section 5.01 hereof or (b) shall be made unless the assignee, lessee, purchaser
or other transferee, as the case may be, prior to or simultaneously with such
assignment, lease, sale, transfer or other disposition, assumes, by delivery of
an instrument in writing satisfactory in form to the Trustee and the Authority,
all other obligations of the Company hereunder to the extent of the interest
assigned, leased, sold, transferred or otherwise disposed of, and the Company
shall be released of and discharged from such obligations to the extent so
assumed. Notwithstanding the foregoing, (a) if (i) the Company’s
interest in this Agreement shall be assigned as a whole or in undivided part,
(ii) the Company’s interest in the Facilities shall be leased as a whole or in
undivided part and the term of such leasehold or the term of any extension or
extensions thereof at the option of the Company shall extend beyond the maturity
date of the Bonds or (iii) the Company’s interest in the Facilities shall be
sold, transferred or otherwise disposed of as a whole or in undivided part, and
(b) in the event that the assignee, lessee, purchaser or other transferee shall
assume the obligations of the Company under Section 5.01 hereof for the
remaining term of this Agreement, to the extent of such assignment, lease, sale,
transfer or other disposition, the Company shall be released from and discharged
of all liability in respect of such obligations to the extent so assumed (but
only to such extent); provided, however, that the release and discharge of the
Company pursuant to clause (b) shall be conditioned upon the delivery by the
Company to the Authority and the Trustee of a certificate of an Independent
Expert (as hereinafter defined) describing the interests so assigned, leased,
sold, transferred or otherwise disposed of, together with all other rights,
interests, assets and/or properties assigned, leased, sold, transferred or
otherwise disposed of by the Company to the same Person in the same or a related
transaction, stating that such rights, interests, assets and/or properties so
described constitute facilities for the generation,
transmission and/or distribution of electric energy and stating that,
in the opinion of such Independent Expert, the Fair Value (as hereinafter
defined) of such rights, interests, assets and/or properties to the Person
acquiring the same is not less than an amount equal to 10/7 of the sum of (x)
the aggregate principal amount of the Bonds then Outstanding and (y) the
outstanding principal amount of all other obligations of the Company
representing indebtedness for borrowed money or for the deferred purchase price
of property which are being assumed by such Person; provided, further, that
after any such assumption, release and discharge as aforesaid, the Company may
again assume such obligations under Section 5.01 hereof, in whole or in part, at
any time and from time to time, and, to the extent of any such assumption by the
Company (but only to such extent), the aforesaid assignee, lessee, purchaser or
other transferee shall be released from and discharged of all liability in
respect of such obligations.
Anything
herein to the contrary notwithstanding, the Company shall not make any
assignment, lease or sale as provided in the immediately preceding paragraph
unless it shall have furnished to the Authority and the Trustee an opinion of
Bond Counsel to the effect that the
13
proposed
assignment, lease or sale will not impair the validity under the Act of the
Bonds and will not adversely affect the exclusion of interest on the Bonds from
gross income for federal tax purposes.
After any
lease, sale, transfer or other disposition of any element or unit of the
Facilities, or any interest therein, the Company may, at its option, cause such
element or unit, or interest therein, to no longer be deemed to be part of the
Facilities for the purposes of this Agreement by delivering to the Authority and
the Trustee the agreements or other documents required pursuant to Section 7.02
hereof together with an instrument signed by an Authorized Company
Representative stating that such element or unit, or interest therein, shall no
longer be deemed to be part of the Facilities for the purposes of this
Agreement.
For
purposes of this Section 7.01:
(a)
“Independent Expert” means a Person which (i) is an engineer, appraiser or other
expert and which, with respect to any certificate to be delivered pursuant to
this Section, is qualified to pass upon the matter set forth in such certificate
and (ii)(A) is in fact independent, (B) does not have any direct material
financial interest in the transferee or in any obligor upon the Bonds or under
this Agreement or in any affiliate of the transferee or any such obligor, (C) is
not connected with the transferee or any such obligor as an officer, employee,
promoter, underwriter, trustee, partner, director or any person performing
similar functions and (D) is approved by the Trustee in the exercise of
reasonable care; for purposes of this definition “engineer” means a Person
engaged in the engineering profession or otherwise qualified to pass upon
engineering matters (including, but not limited to, a Person licensed as a
professional engineer, whether or not then engaged in the engineering
profession); and for purposes of this definition “appraiser” means a Person
engaged in the business of appraising property or otherwise qualified to pass
upon the Fair Value or fair market value of property.
(b)
“Fair Value” means the fair value of the interests, rights, assets and/or
properties assigned, leased, sold, transferred or otherwise disposed of (but, in
the case of a lease, only to the extent of such lease) as may be determined by
reference to (i) except in the case of a lease, the amount which would be likely
to be obtained in an arm’s-length transaction with respect to such interests,
rights, assets and/or properties between an informed and willing buyer and an
informed and willing seller, under no compulsion, respectively, to buy or sell,
(ii) in the case of a lease, the amount (discounted to present value at a rate
not lower than the taxable equivalent of the yield to maturity of the Bonds
based on prevailing market prices immediately prior to the first public
announcement of the proposed transaction) which would be likely to be obtained
in an arm’s-length transaction with respect to such interests, rights, assets
and/or properties between an informed and willing lessee and an informed and
willing lessor, neither under any compulsion to lease; (iii) the amount of
investment with respect to such interests, rights, assets and/or properties
which, together with a reasonable return thereon, would be likely to be
recovered through ordinary business operations or otherwise, (iv) the cost,
accumulated depreciation and replacement cost with respect to such interests,
rights, assets and/or properties and/or (v) any other relevant factors;
provided, however, that (x) Fair Value shall be determined without deduction for
any mortgage, deed of trust, pledge,
14
security
interest, encumbrance, lease, reservation, restriction, servitude, charge or
similar right or any other lien of any kind and (y) the Fair Value to the
transferee of any property shall not reflect any reduction relating to the fact
that such property may be of less value to a Person which is not the owner,
lessee or operator of the property or any portion thereof than to a Person which
is such owner, lessee or operator. Fair Value may be determined,
without physical inspection, by the use of accounting and engineering records
and other data maintained by the Company or the transferee or otherwise
available to the Independent Expert certifying the same.
SECTION
7.02. Instrument
Furnished to the Authority and Trustee. The
Company shall, within fifteen (15) days after the delivery thereof, furnish to
the Authority and the Trustee a true and complete copy of the agreements or
other documents effectuating any such assignment, lease, sale, transfer or other
disposition.
SECTION
7.03. Limitation. This
Agreement shall not be assigned nor shall the Facilities be leased, sold,
transferred or otherwise disposed of, in whole or in part, except as provided in
this Article VII or in Section 6.01 or 5.02 hereof. This Article VII
shall not apply to any sale, transfer or other disposition by the Company of all
of its assets, as or substantially as an entirety, as contemplated in Section
6.01.
ARTICLE
VIII
EVENTS OF
DEFAULT AND REMEDIES
SECTION
8.01. Events of
Default. Each
of the following events shall constitute and is referred to in this Agreement as
an “Event of Default”:
(a)
a failure by the Company to make any Loan Payment, which failure shall have
resulted in an “Event of Default” under clause (a) or (b) of Section 9.01 of the
Indenture;
(b)
a failure by the Company to pay when due any amount required to be paid under
this Agreement or to observe and perform any covenant, condition or agreement on
its part to be observed or performed (other than a failure described in clause
(a) above), which failure shall continue for a period of sixty (60) days after
written notice, specifying such failure and requesting that it be remedied,
shall have been given to the Company by the Authority or the Trustee, unless the
Authority and the Trustee shall agree in writing to an extension of such period
prior to its expiration; provided, however, that the Authority and the Trustee
shall be deemed to have agreed to an extension of such period if corrective
action is initiated by the Company within such period and is being diligently
pursued; or
(c)
the dissolution or liquidation of the Company, or failure by the Company
promptly to lift any execution, garnishment or attachment of such consequence as
will impair its ability to make any payments under this Agreement, or the entry
of an order for relief by a court of competent jurisdiction in any proceeding
for its liquidation or reorganization under the provisions of any bankruptcy act
or under any similar act which
15
may be
hereafter enacted, or an assignment by the Company for the benefit of its
creditors, or the entry by the Company into an agreement of composition with its
creditors (the term “dissolution or liquidation of the Company,” as used in this
clause, shall not be construed to include the cessation of the corporate
existence of the Company resulting either from a merger or consolidation of the
Company into or with another entity or a dissolution or liquidation of the
Company following a transfer of all or substantially all its assets as an
entirety, under the conditions permitting such actions contained in Section 6.01
hereof).
SECTION
8.02. Force
Majeure. The
provisions of Section 8.01 hereof are subject to the following limitations: if
by reason of acts of God; strikes, lockouts or other industrial disturbances;
acts of public enemies; orders of any kind of the government of the United
States or of the State of Arizona, or any department, agency, political
subdivision, court or official of any of them, or any civil or military
authority; insurrections; riots; epidemics; landslides; lightning; earthquakes;
volcanoes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances; explosions;
breakage or accident to machinery; partial or entire failure of utilities; or
any cause or event not reasonably within the control of the Company, the Company
is unable in whole or in part to carry out any one or more of its agreements or
obligations contained herein, other than its obligations under Sections 5.01,
5.03, 5.05, and 6.01 hereof, the Company shall not be deemed in default by
reason of not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such
inability. The Company shall make reasonable effort to remedy with
all reasonable dispatch the cause or causes preventing it from carrying out its
agreements; provided, that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company,
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the judgment of the Company unfavorable
to the Company.
SECTION
8.03. Remedies. (a) Upon
the occurrence and continuance of any Event of Default described in clause (a)
of Section 8.01 hereof, and further upon the condition that, in accordance with
the terms of the Indenture, the Bonds shall have been declared to be immediately
due and payable pursuant to any provision of the Indenture, the Loan Payments
shall, without further action, become and be immediately due and
payable.
Any
waiver of any “Event of Default” under the Indenture and a rescission and
annulment of its consequences shall constitute a waiver of the corresponding
Event or Events of Default under this Agreement and a rescission and annulment
of the consequences thereof.
(b)
Upon the occurrence and continuance of any Event of Default, the Authority, or
the Trustee with respect to the rights of the Authority assigned to the Trustee
by the Indenture, may take any action at law or in equity to collect any
payments then due and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of the Company
hereunder.
(c)
Any amounts collected by the Trustee from the Company pursuant to this Section
8.03 shall be applied in accordance with the Indenture.
16
SECTION
8.04. No Remedy
Exclusive. No
remedy conferred upon or reserved to the Authority hereby is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the
Authority to exercise any remedy reserved to it in this Article VIII, it shall
not be necessary to give any notice, other than such notice as may be herein
expressly required.
SECTION
8.05. Reimbursement of
Attorneys’ and Agents’ Fees. If
the Company shall default under any of the provisions hereof and the Authority
or the Trustee shall employ attorneys or agents or incur other reasonable
expenses for the collection of payments due hereunder or for the enforcement of
performance or observance of any obligation or agreement on the part of the
Company contained herein, the Company will on demand therefor reimburse the
Authority or the Trustee and any predecessor Trustee, as the case may be, for
the reasonable fees of such attorneys and such other reasonable expenses so
incurred.
SECTION
8.06. Waiver of
Breach. In
the event any obligation created hereby shall be breached by either of the
parties and such breach shall thereafter be waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder. In view of the assignment
of certain of the Authority’s rights and interest hereunder to the Trustee, the
Authority shall have no power to waive any breach hereunder by the Company in
respect of such rights and interest without the consent of the Trustee, and the
Trustee may exercise any of such rights of the Authority hereunder.
ARTICLE
IX
REDEMPTION
OF BONDS
SECTION
9.01. Redemption of
Bonds. The
Authority shall take, or cause to be taken, the actions required by the
Indenture to discharge the lien created thereby through the redemption, or
provision for payment or redemption, of all Bonds then Outstanding, or to effect
the redemption, or provision for payment or redemption, of less than all the
Bonds then Outstanding, upon receipt by the Authority and the Trustee from the
Company of a notice designating the principal amount of the Bonds to be
redeemed, or for the payment or redemption of which provision is to be made,
and, in the case of redemption of Bonds, or provision therefor, specifying the
date of redemption and the applicable redemption provision of the
Indenture. Such redemption date shall not be less than forty-five
(45) days from the date such notice is given (unless a shorter notice is
satisfactory to the Trustee). Unless otherwise stated therein, such
notice shall be revocable by the Company at any time prior to the time at which
the Bonds to be redeemed, or for the payment or redemption of which provision is
to be made, are first deemed to be paid in accordance with Article VIII of the
Indenture. The Company shall furnish any moneys or Government
Obligations (as defined in the Indenture) required by the Indenture to be
deposited with the Trustee or otherwise paid by the Authority in connection with
any of the foregoing purposes.
17
SECTION
9.02. Compliance with
the Indenture. Anything
in this Agreement to the contrary notwithstanding, the Authority and the Company
shall take all actions required by this Agreement and the Indenture in order to
comply with any provisions of the Indenture requiring the mandatory redemption
of Bonds.
ARTICLE
X
MISCELLANEOUS
SECTION
10.01. Term of
Agreement. This
Agreement shall remain in full force and effect from the date hereof until the
right, title and interest of the Trustee in and to the Trust Estate (as defined
in the Indenture) shall have ceased, terminated and become void in accordance
with Article VIII of the Indenture and until all payments required under this
Agreement shall have been made. Notwithstanding the foregoing, the
covenants contained in Sections 5.03, 5.04, Section 6.04 and 8.05 hereof shall
survive the termination of this Agreement.
SECTION
10.02. Notices. Except
as otherwise provided in this Agreement, all notices, certificates, requests,
requisitions and other communications hereunder shall be in writing and shall be
sufficiently given and shall be deemed given when mailed by registered mail,
postage prepaid, addressed as follows: if to the Authority, ▇/▇ ▇▇▇▇▇, ▇▇▇▇▇
& Slania, P.C., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; if
to the Company, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasurer; and if to the Trustee, at such address as shall be
designated by it in the Indenture. A copy of each notice,
certificate, request or other communication given hereunder to the Authority,
the Company, or the Trustee shall also be given to the others. The
Authority, the Company, and the Trustee may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
SECTION
10.03. Parties in
Interest. This
Agreement shall inure to the benefit of and shall be binding upon the Authority,
the Company and their respective successors and assigns, and no other person,
firm or corporation shall have any right, remedy or claim under or by reason of
this Agreement; provided, however, that the rights and remedies granted to the
Authority in Article VIII hereof, shall inure to the benefit of the Trustee, on
behalf of the Owners from time to time of the Bonds, and shall be enforceable by
the Trustee as a third party beneficiary or as assignee of the Authority; and
provided, further, that neither Pima County, Arizona nor the State of Arizona
shall in any event be liable for the payment of the principal of or premium, if
any, or interest on the Bonds or for the performance of any pledge, mortgage,
obligation or agreement created by or arising out of this Agreement or the
issuance of the Bonds, and further that neither the Bonds nor any such
obligation or agreement of the Authority shall be construed to constitute an
indebtedness of Pima County, Arizona or the State of Arizona within the meaning
of any constitutional or statutory provisions whatsoever, but shall be limited
obligations of the Authority payable solely out of the revenues derived from
this Agreement, or from the sale of the Bonds, or from the investment or
reinvestment of any of the foregoing, as provided herein and in the
Indenture.
SECTION
10.04. Amendments. This
Agreement may be amended only by written agreement of the parties hereto,
subject to the limitations set forth herein and in the Indenture.
18
SECTION
10.05. Counterparts. This
Agreement may be executed in any number of counterparts, each of which, when so
executed and delivered, shall be an original; but such counterparts shall
together constitute but one and the same Agreement.
SECTION
10.06. Severability. If
any clause, provision or section of this Agreement shall, for any reason, be
held illegal or invalid by any court, the illegality or invalidity of such
clause, provision or section shall not affect any of the remaining clauses,
provisions or sections hereof, and this Agreement shall be construed and
enforced as if such illegal or invalid clause, provision or section had not been
contained herein. In case any agreement or obligation contained in
this Agreement be held to be in violation of law, then such agreement or
obligation shall be deemed to be the agreement or obligation of the Authority or
the Company, as the case may be, to the full extent permitted by
law.
SECTION
10.07. Governing
Law. The
laws of the State of Arizona shall govern the construction and enforcement of
this Agreement, except that the provisions of Section 13.09 of the Indenture,
construed as provided in Section 13.07 of the Indenture, shall apply to this
Agreement as if contained herein.
SECTION
10.08. Notice Regarding
Cancellation of Contracts. As
required by the provisions of Section 38-511, Arizona Revised Statutes, as
amended, notice is hereby given that political subdivisions of the State of
Arizona or any of their departments or agencies may, within three (3) years of
its execution, cancel any contract, without penalty or further obligation, made
by the political subdivisions or any of their departments or agencies on or
after September 30, 1988, if any person significantly involved in initiating,
negotiating, securing, drafting or creating the contract on behalf of the
political subdivisions or any of their departments or agencies is, at any time
while the contract or any extension of the contract is in effect, an employee or
agent of any other party to the contract in any capacity or a consultant to any
other party of the contract with respect to the subject matter of the
contract. The cancellation shall be effective when written notice
from the chief executive officer or governing body of the political subdivision
is received by all other parties to the contract unless the notice specifies a
later time.
The
Company covenants and agrees not to employ as an employee, agent or, with
respect to the subject matter of this Agreement, a consultant, any person
significantly involved in initiating, negotiating, securing, drafting or
creating such Agreement on behalf of the Authority within three (3) years from
the execution hereof, unless a waiver is provided by the Authority.
[Remainder
of Page Intentionally Left Blank]
19
IN
WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
executed as of the day and year first above written.
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THE
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF PIMA
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇
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Title: Vice
President
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By:
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/s/ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇
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Title: Secretary
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TUCSON
ELECTRIC POWER COMPANY
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By:
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/s/ Kentton ▇. ▇▇▇▇▇ | |
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Name: Kentton
▇. ▇▇▇▇▇
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Title: Vice
President, Finance and Rates
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EXHIBIT
A
A portion
of the costs of the construction, improvement or equipping of the following
Facilities will be refinanced with the proceeds of the Industrial Development
Revenue Bonds, 2008 Series A (Tucson Electric Power Company Project) issued by
The Industrial Development Authority of the County of Pima and referred to in
the foregoing Loan Agreement.
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Certain
high voltage transmission facilities and related improvements used to transmit
energy from Unit No. 2 of the Springerville Generating Station located in Apache
County, Arizona to the City of Tucson and environs in Pima County and to Fort
Huachuca in adjacent Cochise County, Arizona and additions and improvements to
the Company’s low-voltage transmission and distribution facilities in the City
of Tucson and environs in Pima County and to Fort Huachuca and additions and
improvements to the ▇▇▇▇▇ Generating Station (formerly known as the Irvington
Generating Station) located in the City of Tucson, more particularly described
in the Tax Certificate and Agreement, dated March 19, 2008, between The
Industrial Development Authority of the County of Pima and Tucson Electric Power
Company.
A-1