THIS
FINANCING AGREEMENT made and entered into as of March 1, 2003 (this
“Agreement”), by and between CLARK COUNTY, NEVADA, a political subdivision of
the State of Nevada, party of the first part (hereinafter sometimes referred to as the
“Issuer”), and SOUTHWEST GAS CORPORATION, a California corporation, party of the
second part (hereinafter sometimes referred to as the “Borrower”),
W
I T N E S S E T H:
WHEREAS,
concurrently with the execution and delivery of this Agreement, the Issuer is entering
into an Indenture of Trust, dated as of March 1, 2003 (the “Indenture”),
with BNY Midwest Trust Company, as trustee (the “Trustee”) thereunder, pursuant
to which $50,000,000 principal amount of Clark County, Nevada Industrial Development
Revenue Bonds (Southwest Gas Corporation Project) Series 2003A, $50,000,000 principal
amount of Clark County, Nevada Industrial Development Revenue Bonds (Southwest Gas
Corporation Project) Series 2003B, $30,000,000 principal amount of Clark County, Nevada
Industrial Development Revenue Bonds (Southwest Gas Corporation Project) Series 2003C,
$20,000,000 principal amount of Clark County, Nevada Industrial Development Revenue Bonds
(Southwest Gas Corporation Project) Series 2003D and $15,000,000 principal amount of Clark
County, Nevada Industrial Development Revenue Bonds (Southwest Gas Corporation Project)
Series 2003E, will be issued and secured; and
WHEREAS,
the Issuer hereby confirms and the Borrower hereby acknowledges and adopts the recitals to
the Indenture as though fully set forth here;
NOW,
THEREFORE, in consideration of the respective representations and agreements hereinafter
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1
Definitions of Terms
.
Except as defined below, for all purposes of this Agreement, unless the context clearly
requires otherwise, all terms defined in Article I of the Indenture have the same meanings
in this Agreement.
“Event
of Default” under this Agreement is defined in Section 6.1.
SECTION 1.2
Number and Gender
. The
singular form of any word used herein, including the terms defined in Section 1.02 of the
Indenture, shall include the plural, and vice versa. The use herein of a word of any
gender shall include all genders.
SECTION 1.3
Articles, Sections
.
Unless otherwise specified, references to Articles, Sections and other subdivisions of
this Agreement are to the designated Articles, Sections and other subdivisions of this
Agreement as originally executed. The words “hereof,” “herein,”
“hereunder” and words of similar import refer to this Agreement as a whole. The
headings
or titles of the several articles and sections, and the table of contents
appended to copies hereof, shall be solely for convenience of reference and shall not
affect the meaning, construction or effect of the provisions hereof.
ARTICLE II
REPRESENTATIONS
SECTION 2.1
Representations by the
Issuer
. The Issuer makes the following representations as the basis for the undertakings
on its part herein contained:
(a)
The Issuer is a political subdivision of the State. Under the provisions of the
Act, the Issuer has the power to enter into the transactions contemplated by
this Agreement and to carry out its obligations hereunder. By proper action, the
Issuer has been duly authorized to execute, deliver and duly perform this
Agreement and the Indenture. To the extent the foregoing representation involves
a legal conclusion, such representation is made in reliance on the opinion of
Bond Counsel.
(b)
To finance or refinance part of the Cost of the Project, including the refunding
of the Refunded Bonds, the Issuer will issue the Bonds, which will mature, bear
interest and be subject to redemption as provided in the Indenture.
(c)
The Issuer’s interest in this Agreement (except certain rights of the
Issuer to payment of fees and expenses and indemnification, to rights of
inspection and to consents and rights to receive any notices, certificates,
requests, requisitions and other communications) will be pledged to the Trustee
as security for payment of the principal of, and premium, if any, and interest
on the Bonds.
(d)
The Issuer has not pledged and will not pledge its interest in this Agreement
for any purpose other than to secure the Bonds under the Indenture.
(e)
The Issuer is not in default under any of the provisions of the laws of the
State which default would affect its existence or its powers referred to in
subsection (a) of this Section 2.1.
(f)
The Issuer has found and determined and hereby finds and determines that all
requirements of the Act with respect to the issuance of the Bonds and the
execution of this Agreement and the Indenture have been complied with and that
financing or refinancing the Project, including the refunding of the Refunded
Bonds, by issuing the Bonds and entering into this Agreement and the Indenture
is in the public interest, serves the public purposes and meets the requirements
of the Act.
(g)
On February 4, 2003, the Issuer adopted an initial resolution authorizing the
issuance of bonds in an amount not to exceed $205,000,000 for a variety of
purposes, including to finance a portion of the Cost of the New Money Project
and to refinance the Prior Project. On March 4, 2003, the Issuer adopted
its resolution approving the issuance of the Bonds.
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(h)
No member, officer or other official of the Issuer has any interest whatsoever
in the Borrower or in the transactions contemplated by this Agreement.
SECTION 2.2
Representations by the
Borrower
. The Borrower makes the following representations as the basis for the
undertakings on its part herein contained:
(a)
The Borrower is a corporation duly incorporated and in good standing in the
State of California, is duly qualified to transact business and in good standing
in the State, has power to enter into and by proper corporate action has been
duly authorized to execute and deliver this Agreement and all other documents
contemplated hereby to be executed by the Borrower in connection with the
issuance and sale of the Bonds.
(b)
Neither the execution and delivery of this Agreement or any other documents
contemplated hereby to be executed by the Borrower in connection with the
issuance and sale of the Bonds, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, conflicts with or results in a breach of any of
the terms, conditions or provisions of the Borrower’s articles of
incorporation or by-laws or of any corporate actions or of any agreement or
instrument to which the Borrower is now a party or by which it is bound, or
constitutes a default (with due notice or the passage of time or both) under any
of the foregoing, or result in the creation or imposition of any prohibited
lien, charge or encumbrance whatsoever upon any of the property or assets of the
Borrower under the terms of any instrument or agreement to which the Borrower is
now a party or by which it is bound.
(c)
The Cost of the Project is as set forth in the Tax Certificate and has been
determined in accordance with sound engineering/construction and accounting
principles. All the information provided by, and all the representations made
by, the Borrower in the Tax Certificate are true and correct as of the date
thereof.
(d)
The Project, consisting of the Prior Project and the New Money Project, consists
of those facilities described in Exhibit A-1 and Exhibit A-2 to this Agreement
and in the Southwest Gas Corporation Engineering Certificate dated the date of
issuance of the Bonds (the “Engineering Certificate”) which is
incorporated by reference herein, and the Borrower shall not make any changes to
the Project except as otherwise permitted hereunder or to the operation thereof
which would affect the qualification of the Project under the Act or impair the
Tax-Exempt status of the Bonds. In particular, the Borrower shall comply with
all requirements set forth in the Tax Certificate. The Borrower intends to cause
the Project to be used for the local furnishing of natural gas until the
principal of, the premium, if any, and the interest on the Bonds shall have been
paid.
(e)
The Borrower has and will have title to and all necessary easements to install
the Project, sufficient to carry out the purposes of this Agreement.
(f)
At the time of submission of an application to the Issuer for financial
assistance in connection with the Project and on the dates on which the Issuer
took action on such application, permanent financing for the Project had not
otherwise been obtained or arranged.
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(g)
All certificates, approvals, permits and authorizations with respect to the
construction of the Project of agencies of applicable local governments, the
State and the federal government have been obtained or will be obtained in the
normal course of business.
(h)
No event has occurred and no condition exists which would constitute an Event of
Default or which with the passing of time or with the giving of notice or both
would become such an Event of Default.
(i)
To the best of the knowledge of the Borrower, no member, officer, or other
official of the Issuer has any interest whatsoever in the Borrower or in the
transactions contemplated by this Agreement.
(j)
The Borrower has reviewed the Indenture and hereby accepts the terms thereof.
ARTICLE III
THE PROJECT; ISSUANCE
OF THE BONDS
SECTION 3.1
The Project
. The Borrower
has acquired, constructed, equipped, and installed the Prior Project and all other
facilities and real and personal property necessary for the operation of the Prior Project
substantially in accordance with the Plans and Specifications for the Prior Project. The
Borrower agrees that it will acquire, construct, equip, and install, or complete the
acquisition, construction, equipping, and installation of the New Money Project and all
other facilities and real and personal property necessary for the operation of the New
Money Project. The Borrower further agrees that it at all times shall operate the Project
as a “project” within the meaning of the Act and so that the Project constitutes
Exempt Facilities. The Borrower agrees to proceed with due diligence to complete the New
Money Project within three years from the date hereof.
SECTION 3.2
Agreement to Issue Bonds;
Application of Bond Proceeds
. In order to provide funds to lend to the Borrower to finance
or refinance part of the Cost of the Project as provided in Section 4.1 hereof, the Issuer
agrees that it will issue under the Indenture and sell and cause to be delivered to each
Initial Purchaser thereof its Series 2003A Bonds, its Series 2003B Bonds, its Series 2003C
Bonds, its Series 2003D Bonds and its Series 2003E Bonds in an aggregate principal amount
not to exceed $165,000,000, each 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 provided in Section 2.02(e) of the Indenture.
SECTION 3.3
Disbursements from the
Construction Fund and the Costs of Issuance Fund
. The Borrower will request pursuant to
the terms of the Indenture, authorize and direct the Trustee to disburse the moneys in the
Construction Fund to or on behalf of the Borrower, upon compliance with Section 6.07 of
the Indenture, for the following purposes (but, subject to the provisions of Section 3.4
hereof, for no other purpose):
(a)
Payment to the Borrower of such amounts, if any, as shall be necessary to
reimburse the Borrower, in full for all advances and payments made by it at any
time prior to or after the delivery of the Bonds for expenditures incurred in
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connection with the preparation of plans and specifications for the New Money
Project (including any preliminary study or planning of the New Money Project or
any aspect thereof) and the acquisition, construction and installing of the New
Money Project.
(b)
Payment for labor, services, materials and supplies used or furnished in site
improvement and in the acquisition, construction and installing of the New Money
Project and miscellaneous expenditures incidental to any of the foregoing items.
(c)
Payment of the fees, if any, for architectural, engineering, legal, underwriting
and supervisory services with respect to the New Money Project and the Bonds.
(d)
Payment of the premiums on all insurance that was required to be acquired and
maintained in connection with the New Money Project during the construction
period with respect to the New Money Project.
(e)
Payment of the taxes, assessments and other charges, if any, that may have
become payable during the construction period with respect to the New Money
Project.
(f)
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 New Money Project.
(g)
Payment of any other costs which constitute a part of the Cost of the New Money
Project in accordance with generally accepted accounting principles, which are
permitted by the Act and which will not adversely affect the Tax-Exempt status
of the Bonds.
Each
of the payments referred to in Sections 3.3(a)-(g) shall be made upon receipt by the
Trustee of a written requisition in the form prescribed by Section 6.07 of the Indenture,
signed by the Authorized Borrower Representative.
The
Borrower will authorize and direct the Trustee, upon compliance with Section 6.08 of the
Indenture, to disburse the moneys in the Costs of Issuance Fund to or on behalf of the
Borrower only for Costs of Issuance. Each of the payments referred to in this paragraph
shall be made upon receipt by the Trustee of a written requisition in the form prescribed
by Section 6.08 of the Indenture.
The
Borrower covenants and agrees that at all times at least 97% of the moneys so disbursed
out of the Construction Fund will be used to pay or reimburse the Borrower for the payment
of qualifying costs of Exempt Facilities as described in the Tax Certificate. The Borrower
further covenants and agrees that it will not take any action or authorize or permit, any
action to be taken which would adversely affect the Tax-Exempt status of the Bonds.
The
Borrower understands that the Tax Certificate may impose additional restrictions on
withdrawals from the Construction Fund, and the Borrower agrees to be bound by such
restrictions, if any.
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SECTION 3.4
Investment of Moneys
. Any
moneys held as a part of the Bond Fund or the Construction Fund or the Costs of Issuance
Fund shall be invested or reinvested by the Trustee at the written direction of an
Authorized Borrower Representative as to specific investments, to the extent permitted by
law, in accordance with Section 7.01 of the Indenture. The Borrower shall not direct the
Trustee to make any investments or reinvestments other than those permitted by the
Indenture and as permitted by law. In making any such investments, the Trustee may rely on
directions delivered to it pursuant to this Section, and the Trustee and the Issuer shall
be relieved of all liability with respect to making such investments in accordance with
such directions. The Borrower agrees that to the extent any moneys in the Bond Fund
represent moneys held for the payment of the principal of Bonds which have become due at
maturity or on a redemption date and the premium, if any, on such Bonds or interest due on
Bonds in all cases where Bonds have not been presented for payment and paid or such
interest is unclaimed, or to the extent any moneys are held by the Trustee for the payment
of the purchase price of Bonds which have not been presented for payment, such moneys
shall not be invested.
SECTION 3.5
Costs of Issuance
. The
Borrower covenants and agrees to pay all costs incurred in connection with the issuance of
the Bonds, which may be reimbursed or paid out of the proceeds of the Bonds to the extent
permitted by the Act, the Code and the Tax Certificate, and the Issuer shall have no
obligation with respect to such costs.
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 Borrower the proceeds received by the Issuer from the sale of the Bonds in order to
finance or refinance a portion of the Cost of the Project. The Issuer’s obligation
herein shall be solely to deposit the proceeds of the Bonds with the Trustee as provided
in Section 3.2 hereof. Upon such deposit, the Issuer will be deemed to have made five
loans to the Borrower, one in an amount equal to the principal amount of the Series 2003A
Bonds, one in an amount equal to the principal amount of the Series 2003B Bonds, one in an
amount equal to the principal amount of the Series 2003C Bonds, one in an amount equal to
the principal amount of the Series 2003D Bonds and one in an amount equal to the principal
amount of the Series 2003E Bonds.
(b)
The Issuer and the Borrower 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 portions thereof), 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 of principal (whether at maturity or upon redemption or acceleration) of
and/or premium, if any, and/or interest on any Series of 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 Borrower shall
pay to the Trustee in immediately available funds, for deposit in the account within the
Bond Fund relating to such
6
Series of Bonds, as a repayment installment of the loan of the
proceeds of the Bonds of such Series pursuant to Section 4.1 hereof, a sum equal to the
amount payable on such interest payment or redemption or acceleration or maturity date as
principal (whether at maturity or upon redemption or acceleration) of and premium, if any,
and interest on the Bonds as provided in the Indenture. In the event the Borrower shall
fail to make any of the payments required in this subsection, the payment so in default
shall continue as an obligation of the Borrower until the amount in default shall have
been fully paid.
(b)
The Borrower shall pay or cause to be paid to the Trustee amounts equal to the
amounts to be paid by the Trustee for the purchase of Bonds which have not been
remarketed pursuant to Article IV of the Indenture and the premium, if any, on
the Bonds which have been remarketed pursuant to Article IV of the Indenture, in
each case as and to the extent provided in the Indenture. Such amounts shall be
paid or caused to be paid by the Borrower to the Trustee, acting as Tender Agent
(or, for so long as the Bonds are Book-Entry Bonds, to the Securities
Depository), in immediately available funds on the dates and no later than the
times such payments pursuant to Section 4.05 of the Indenture are to be made. In
the event the Borrower shall fail to make (or cause to be made) any of the
payments required in this subsection, the payment so in default shall continue
as an obligation of the Borrower until the amount in default shall have been
fully paid. The obligation of the Borrower to make any payment under this
subsection shall be deemed to have been satisfied to the extent of any
corresponding payment made by a Bank or a Liquidity Provider to the Trustee
under any Letter of Credit or Liquidity Facility.
(c)
The Borrower agrees to pay to the Trustee, (i) the reasonable fees,
charges and expenses of the Trustee, as Registrar, and as Paying Agent and
Tender Agent, as and when the same become due, and (ii) the reasonable
fees, charges and expenses of the Trustee, as and when the same become due under
the Indenture, including payments under Section 6.4 hereof, and including the
annual fee of the Trustee for the services rendered by it and the expenses
incurred by it under the Indenture. In the event the Borrower should fail to
make any of the payments required in this subsection, the item or installment so
in default shall continue as an obligation of the Borrower until the amount in
default shall have been fully paid; provided, however, that such failure of
payment shall not be deemed an event of default during the period in which the
Borrower is in good faith contesting, by appropriate proceedings promptly
initiated and diligently conducted, such payment required by this subsection.
The provision of this subsection shall survive the retirement of the Bonds and
the termination of this Agreement.
(d)
The Borrower shall pay to the Issuer upon demand all Administrative Expenses,
including payments under Section 6.4 hereof. In the event the Borrower should
fail to make any of the payments required in this subsection, the item or
installment so in default shall continue as an obligation of the Borrower until
the amount in default shall have been fully paid.
(e)
The Borrower releases the Issuer and the Trustee from, and covenants and agrees
that neither the Issuer nor the Trustee shall be liable for, and covenants and
agrees, to the extent permitted by law, to indemnify and hold harmless the
Issuer and the Trustee and their directors, officers, employees and agents from
and against, any and all losses, claims, damages, liabilities or expenses, of
every conceivable kind, character and nature whatsoever arising out of,
resulting from or in any way connected with (1) the Project, or the conditions,
occupancy, use, possession, conduct or management of,
7
or work done in or about,
or from the planning, design, acquisition, installation or construction of the
Project or any part thereof (including without limitation any of the foregoing
relating to any federal, state or local environmental law, rule or regulation);
(2) the issuance of any Bonds or any certifications, covenants or
representations made in connection therewith and the carrying out of any of the
transactions contemplated by the Bonds and this Agreement; (3) the
Trustee’s acceptance or administration of the trusts under the Indenture,
or the exercise or performance of any of its powers or duties under the
Indenture; or (4) any untrue statement or alleged untrue statement of any
material fact necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading, in any official
statement or other offering circular utilized by the Issuer or any underwriter
or placement agent in connection with the sale or remarketing of any Bonds;
provided that such indemnity shall not be required for damages that result from
willful misconduct (or, as to the Trustee, negligence), including willful
misconduct (or, as to the Trustee, negligence) in the provision of any
statements or information, on the part of the party seeking such indemnity. The
Borrower further covenants and agrees, to the extent permitted by law, to pay or
to reimburse the Issuer and the Trustee and their respective officers, employees
and agents for any and all costs, reasonable attorneys’ fees, liabilities
or expenses incurred in connection with investigating, defending against or
otherwise in connection with any such losses, claims, damages, liabilities,
expenses or actions, except to the extent that the same arise out of the willful
misconduct (or, as to the Trustee, negligence) of the party claiming such
payment or reimbursement. The provisions of this Section shall survive the
retirement of the Bonds and the expiration of this Agreement.
The
indemnified party shall promptly notify the Borrower in writing of any claim or action
covered by this indemnity and brought against the indemnified party, or in respect of
which indemnity may be sought against the Borrower, setting forth the particulars of such
claim or action, and the Borrower will assume the defense thereof, including the
employment of counsel satisfactory to the indemnified party and the payment of all
expenses. The indemnified party may employ separate counsel in any such action and
participate in the defense thereof, and the fees and expenses of such counsel shall be
payable by the Borrower.
(f)
The Borrower agrees to pay to the Remarketing Agent and the Auction Agent the
reasonable fees, charges and expenses of such Remarketing Agent and Auction
Agent, and the Issuer shall have no obligation or liability with respect to the
payment of any such fees, charges or expenses.
(g)
The Borrower agrees to pay any Rebate Requirement (as defined in the Tax
Certificate) to the Trustee for deposit in the Rebate Fund.
(h)
The Borrower also agrees to pay, (i) as soon as practicable after receipt
of request for payment thereof, all expenses required to be paid by the Borrower
under the terms of any bond purchase agreement relating to the sale of the
Bonds; (ii) at the time of issuance of any Bonds, the Issuer’s
administrative fee in the amount of $165,000; and (iii) at the time of
issuance of any Bonds, all reasonable expenses of the Issuer related to such
Bonds which are not otherwise required to be paid by the Borrower under the
terms of this Agreement.
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SECTION 4.3
Unconditional Obligation
.
The obligation of the Borrower to make the payments pursuant to this Agreement and to
perform and observe the other agreements on its part contained herein shall be absolute
and unconditional, irrespective of any defense or any rights of set-off, recoupment or
counterclaim it might otherwise have against the Issuer, and during the term of this
Agreement, the Borrower shall pay (or cause to be paid) absolutely the payments to be made
on account of the loan as prescribed in Section 4.2 and all other payments as prescribed
herein, free of any deductions and without abatement, diminution or set-off. Until such
time as the principal of and premium, if any, and interest on the Bonds shall have been
fully paid, or provisions for the payment thereof shall have been made as required by the
Indenture, the Borrower (i) will not suspend or discontinue any payments required
hereunder, including payments provided for in Section 4.2 hereof; (ii) will
perform and observe all of its other covenants contained in this Agreement; and
(iii) except as provided in Article VII hereof, will not terminate this
Agreement for any cause, including, without limitation, the occurrence of any act or
circumstance that may constitute failure of consideration, destruction of or damage to the
Project, commercial frustration of purpose, any change in the tax or other laws of the
United States of America or of the State or any political subdivision of either of them,
or any failure of the Issuer or the Trustee to perform and observe any covenant, whether
express or implied, or any duty, liability or obligation arising out of or connected with
this Agreement or the Indenture, except to the extent permitted by this Agreement.
SECTION 4.4
Payments Pledged and
Assigned
. It is understood and agreed that all rights to the payment of moneys hereunder
(except payments made to the Trustee pursuant to Sections 4.2(c), 4.2(e) 4.2(g), 4.2(h)
and 6.4 hereof and payments to be made to the Remarketing Agent and the Auction Agent
pursuant to Section 4.2(f) hereof and payments to be made to the Issuer pursuant to
Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof and its rights of indemnification and
inspection and rights to receive notices, certificates, requests, requisitions or other
communications and to give consents hereunder) are pledged and assigned to the Trustee by
the Indenture. The Borrower consents to such pledge and assignment. The Issuer hereby
directs the Borrower and the Borrower hereby agrees to pay or cause to be paid to the
Trustee all said amounts required to be paid by or for the account of the Borrower
pursuant to Section 4.2 hereof (except payments to be made directly to the Remarketing
Agent and the Auction Agent pursuant to Section 4.2(f) hereof and payments to be made
directly to the Issuer pursuant to Sections 4.2(d), 4.2(e), 4.2(h) and 6.4 hereof). The
Project will not constitute any part of the security for the Bonds.
SECTION 4.5
Payment of the Bonds and
Other Amounts
. The Bonds shall be payable from payments made by the Borrower to the
Trustee under Section 4.2(a) hereof and/or from amounts received by the Trustee from a
draw on a Letter of Credit. Payments of principal of or premium, if any, or interest on
the Bonds with moneys in the Bond Fund 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. To the extent provided in the Indenture, whenever any Bonds are
redeemable in whole or in part at the option of the Borrower, the Trustee, on behalf of
the Issuer, shall redeem the same upon the request of the Borrower and such redemption
shall constitute payment of amounts required by Section 4.2(a) hereof equal to the
redemption price of such Bonds.
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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, pursuant to the terms
of the Indenture, such Bonds are thereby deemed paid in full, the Trustee shall notify the
Borrower and the Issuer that such payment requirement has been satisfied. Subject to the
foregoing, or unless the Borrower is entitled to a credit under this Agreement or the
Indenture, all payments shall be in the full amount required by Sections 4.2(a) and (b)
hereof.
ARTICLE V
SPECIAL COVENANTS AND
AGREEMENTS
SECTION 5.1
Right of Access to the
Project and Records
. The Borrower agrees that during the term of this Agreement the
Issuer, the Trustee and the duly authorized agents of either of them shall have the right
at all reasonable times during normal business hours to examine the books and records of
the Borrower with respect to the Project and to enter upon the site of the Project to
examine and inspect the Project; provided, however, that this right is subject to federal
and State laws and regulations applicable to the site of the Project. The rights of access
hereby reserved to the Issuer and the Trustee may be exercised only after such agent shall
have executed release of liability and secrecy agreements if requested by the Borrower in
the form then currently used by the Borrower, and nothing contained in this Section or in
any other provision of this Agreement shall be construed to entitle the Issuer or the
Trustee to any information or inspection involving the confidential know-how of the
Borrower.
SECTION 5.2
Borrower's Maintenance of Its Existence; Assignments
.
(a)
To the extent permitted by law and its articles of incorporation, the Borrower
agrees that during the term of this Agreement it will maintain its corporate
existence in good standing and its authorization to do business in the State and
will not dissolve or otherwise dispose of all or substantially all of its assets
and will not consolidate with or merge into another Person or permit one or more
other Persons to consolidate with or merge into it; provided, however, that the
Borrower may, without violating the covenants in this Section, merge into or
consolidate with or transfer all or substantially all of its assets to a
wholly-owned subsidiary of the Borrower; and provided further that the Borrower
may, without violating the covenants in this Section, combine, consolidate with
or merge into another Person qualified to do business in one of the states of
the United States, or permit one or more other Persons to combine, consolidate
with or merge into it, or sell to another Person all or substantially all of its
assets, if:
(i)
the surviving, resulting or transferee Person, as the case may be (A) assumes
and agrees in writing to pay and perform all of the obligations of the Borrower
hereunder, unless such obligations are assumed by operation of law, and (B) is
qualified to do business in the State;
10
(ii)
any existing Bond Insurance, Liquidity Facility or Letter of Credit will remain
in full force and effect or will be replaced as provided in Sections 5.13 or
5.14, or 5.16, or the Series of Bonds covered by such existing Bond Insurance,
Liquidity Facility or Letter of Credit shall have been redeemed;
(iii)
the long-term ratings on the outstanding Bonds, as applicable, shall be no lower
than the lower of (1) “Baa3” from Moody’s and “BBB-”
from S&P, as applicable, or (2) the long-term ratings on the outstanding
Bonds immediately prior to the transaction; and
(iv)
the short-term ratings on the outstanding Bonds, as applicable, shall be no
lower than the lower of (1) “A-1” from Moody’s, “P-1”
from S&P and “F-1” from Fitch, as applicable, or (2) the
short-term ratings on the outstanding Bonds immediately prior to the
transaction.
The
Borrower agrees to provide the Issuer such information as the Issuer may reasonably
request in order to assure compliance with this Section 5.2(a).
Within
ten (10) Business Days after the consummation of the merger or other transaction described
above, the Borrower shall (except as provided in the next sentence) provide the Issuer,
any Bond Insurer, any Bank, any Liquidity Provider and the Trustee with counterpart copies
of the merger instruments or other documents constituting the transaction but only to the
extent that such documents or instruments are available to the public and not subject to
any confidentiality agreement or restriction, and an officer’s certificate
satisfactory to the Issuer executed by an Authorized Borrower Representative that all of
the provisions of this Section 5.2(a) have been complied with. In the case of a (i) merger
or consolidation of the Borrower and any wholly-owned subsidiary of the Borrower or (ii)
the transfer to any wholly-owned subsidiary of the Borrower of all or substantially all of
the assets of the Borrower, the Borrower shall send the Issuer, any Bond Insurer, any
Bank, any Liquidity Provider and the Trustee a notice of such merger within ten (10)
Business Days after its completion, together with the officer’s certificate described
in the preceding sentence.
Notwithstanding
any other provision of this Section 5.2, the Borrower need not comply with any of the
provisions of Section 5.2(a) if, at the time of such merger, combination, sale of assets,
dissolution or reorganization, the Bonds will be defeased as provided in Article VIII of
the Indenture or redeemed in full as provided in Article III of the Indenture.
(b)
The rights and obligations of the Borrower under this Agreement may be assigned
and delegated, respectively, by the Borrower to any person in whole or in part,
subject, however, to each of the following conditions:
(i)
No assignment other than pursuant to subsection (a) of this Section shall
relieve the Borrower from primary liability for any of its obligations
hereunder, and in the event of any assignment not pursuant to said subsection
(a) the Borrower shall continue to remain primarily liable for the payments
specified in Section 4.2 hereof and for performance and observance of the other
agreements on its part herein provided to be performed and observed by it.
11
(ii)
Any assignment from the Borrower shall retain for the Borrower such rights and
interests as will permit it to perform its obligations under this Agreement, and
any assignee from the Borrower shall assume in writing the obligations of the
Borrower hereunder to the extent of the interest assigned, unless such
obligations are assumed by operation of law.
(iii)
The Borrower shall, within thirty (30) days of each such assignment, furnish or
cause to be furnished to the Issuer and the Trustee a true and complete copy of
each such assignment together with an instrument of assumption, if required, and
an opinion of Counsel satisfactory to the Issuer that the Borrower has complied
with the provision of this Section 5.2(b).
(c)
In the case of any consolidation, merger or transfer pursuant to subsection (a)
hereof or any assignment pursuant to subsection (b) hereof, the Borrower shall
cause to be delivered to the Issuer and the Trustee, not later than the
effective date of such consolidation, merger, transfer or assignment, an opinion
of Bond Counsel to the effect that such consolidation, merger, transfer or
assignment will not, in and of itself, adversely affect the Tax-Exempt status of
any Bonds.
SECTION 5.3
Establishment of
Completion Date; Obligation of Borrower to Complete
. As soon as the New Money Project is
completed, the Authorized Borrower Representative, on behalf of the Borrower, shall
evidence the Completion Date by providing a certificate to the Trustee and the Issuer
stating the Cost of the New Money Project and further stating that (i) the
acquisition, equipping and construction of the New Money Project has been completed
substantially in accordance with the plans, specifications and work orders therefor, and
all labor, services, materials and supplies used in the acquisition, equipping,
rehabilitation and construction have been paid or provided for, and (ii) all other
facilities necessary in connection with the New Money Project have been acquired,
constructed and installed in accordance with the plans and specifications and work orders
therefor and all costs and expenses incurred in connection therewith have been paid or
provided for. Notwithstanding the foregoing, such certificate may state that it is given
without prejudice to any rights of the Borrower against third parties for any claims or
for the payment of any amount not then due and payable which exists at the date of such
certificate or which may subsequently exist. At the time such certificate is delivered to
the Trustee, moneys remaining in the Construction Fund, including any earnings resulting
from the investment of such moneys, shall be used as provided in Section 6.07 of the
Indenture.
SECTION 5.4
Maintenance and Repair;
Taxes; Utility and Other Charges
. The Borrower agrees to maintain, to the extent permitted
by applicable law and regulation, the Project, or cause the Project to be so maintained,
during the term of this Agreement (i) in as reasonably safe condition as its
operations shall permit and (ii) in good repair and in good operating condition,
ordinary wear and tear excepted, making from time to time all necessary repairs thereto
and renewals and replacements thereof.
The
Borrower agrees to pay or cause to be paid during the term of this Agreement all taxes,
governmental charges of any kind lawfully assessed or levied upon the Project or any part
thereof, all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Project and all assessments and charges lawfully made by any
12
governmental body for public improvements that may be secured by a lien on the Project,
provided that with respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Borrower shall be obligated
to pay only such installments as are required to be paid during the term of this
Agreement. The Borrower may, at the Borrower’s expense and in the Borrower’s
name, in good faith, contest any such taxes, assessments and other charges and, in the
event of any such contest, may permit the taxes, assessments or other charges so contested
to remain unpaid during that period of such contest and any appeal therefrom unless by
such nonpayment the Project or any part thereof will be subject to loss or forfeiture.
The
Borrower agrees that it will keep, or cause to be kept, (i) the Project insured
against such risks and in such amounts as are consistent with its insurance practices for
similar types of facilities (which may include self-insurance), and (ii) insurance
against all direct or contingent loss or liability for personal injury, death or property
damage occasioned by the operation of the Project, which insurance may include
self-insurance and may be a part of the policy or policies of insurance customarily
maintained by the Borrower in connection with its general property and liability insurance
upon all of the plants and properties operated by it (including such deductibles as may be
provided in said policies).
SECTION 5.5
Qualification in Nevada
.
The Borrower agrees that throughout the term of this Agreement it, or any successor or
assignee as permitted by Section 5.2 hereof, will be qualified to do business in the
State.
SECTION 5.6
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 Borrower or needs of the Borrower.
SECTION 5.7
Agreement as to Use of
the Project
. The Issuer and the Borrower agree that the Issuer shall have no interest in
the Project.
SECTION 5.8
Notices and Certificates
Required to be Delivered to the Trustee
. The Borrower hereby agrees to provide the Trustee
with the following:
(a)
Within one hundred twenty (120) days of the end of the fiscal year of the
Borrower, a certificate of an Authorized Borrower Representative to the effect
that (i) all payments have been made under this Agreement and that, to the best
of such Authorized Borrower Representative’s knowledge, no Event of Default
or event or condition which with the passage of time or giving of notice or both
would constitute an Event of Default has occurred and is continuing and
(ii) audited financial statements of the Borrower for such fiscal year;
(b)
Upon knowledge of an Event of Default under this Agreement or the Indenture,
notice of such Event of Default, such notice to include a description of the
nature of such event and what steps are being taken to remedy such Event of
Default; and
(c)
Prompt written disclosure of any significant change known to the Borrower that
occurs which would adversely impact the Trustee’s ability to perform its
duties under the Indenture, or of any conflicts which may result because of
13
other business dealings between the Trustee and the Borrower (including, without
limitation, removal or replacement of the Remarketing Agent, if any).
SECTION 5.9
Borrower to Furnish
Notice of Adjustments of Interest Rate Periods
. The Borrower 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
Borrower elects to exercise any such option, the Borrower agrees that it shall cause
notices of adjustments of Rate Periods (or rescissions thereof) to be given to the Issuer,
the Trustee, the Liquidity Provider, the Bank, the Remarketing Agent and the Auction Agent
in accordance with Section 2.03 of the Indenture. The exercise of any such option, and all
actions in connection therewith, may be taken by the Borrower through agents acting on its
behalf, as provided in the Indenture, including without limitation, the Remarketing Agent.
In connection with any change in Rate Periods, if the Indenture requires an opinion of
Bond Counsel as a condition thereto, the Borrower shall, at its sole expense, cause such
opinion to be delivered to the Issuer and the Trustee in accordance with the Indenture.
SECTION 5.10
Information Reporting
.
The Issuer covenants and agrees that, upon the direction of the Borrower 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, Ogden, UT 84201)
a statement setting forth the information required by Section 149(e) of the 1986 Code,
which statement shall be in the form of the Information Reporting Statement
(Form 8038) of the Internal Revenue Service (or any successor form as may be
necessary from time to time with respect to any Bonds).
SECTION 5.11
Tax
Covenants; Rebate
.
(a)
The Borrower covenants that it will not take any action which would adversely
affect the Tax-Exempt status of any of the Bonds, and will take, or require to
be taken, such acts as may be reasonably within its ability and as may from time
to time be required under applicable law or regulation to continue such
Tax-Exempt status of such Bonds; and, in furtherance of such covenants, the
Borrower agrees to comply with the Tax Certificate and the Engineering
Certificate.
(b)
The Borrower covenants that it will not take any action or fail to take any
action with respect to the Bonds which would cause any of the Bonds to be
“arbitrage bonds” within the meaning of Section 148 of the 1986 Code.
(c)
The Borrower covenants that it will not use or permit the use of any property
financed with the proceeds of any of the Bonds by any person (other than a state
or local governmental unit) in such manner or to such extent as would result in
loss of the Tax-Exempt status of any of the Bonds.
(d)
The Borrower shall calculate, or cause to be calculated, its rebate liability at
such times as are required by Section 148(f) of the 1986 Code and any temporary,
proposed or final Regulations as may be applicable to such Bonds from time to
time. The Borrower shall provide to the Trustee a copy of each calculation of
rebate liability prepared by or on behalf of the Borrower, which documentation
shall be made available to the Issuer upon request. The Borrower shall make
14
any
and all payments to the Trustee for deposit in the Rebate Fund, or as otherwise
required to be made to the United States Department of the Treasury in
connection with any of the Bonds pursuant to Section 148(f) of the 1986 Code.
(e)
Notwithstanding any other provisions of this Agreement to the contrary, so long
as necessary in order to maintain the Tax-Exempt status of any of the Bonds, the
covenants in this Section 5.11 shall survive the payment for such Bonds and the
interest thereon, including any payment or defeasance thereof pursuant to
Section 8.01 of the Indenture.
SECTION 5.12
Continuing Disclosure
.
The Borrower shall undertake the continuing disclosure requirements promulgated under
S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or supplemented, if
applicable, and the Issuer shall have no liability to the holders of the Bonds or any
other person with respect to such disclosure matters. Notwithstanding any other provision
of the Indenture, failure of the Borrower to comply with the requirements of S.E.C. Rule
15c2-12, as it may from time to time hereafter be amended or supplemented, shall not be
considered an Event of Default; however, the Trustee, subject to Article X of the
Indenture, may (and, at the request of the Remarketing Agent or the holders of at least
25% in aggregate principal amount of Outstanding Bonds, shall) or any Bondholder or
beneficial owner of any Bonds may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the Borrower to
comply with its obligations under this Section 5.12.
SECTION 5.13
Liquidity Facility
. At
the time of initial issuance and delivery of the Bonds, there is no Liquidity Facility in
effect with respect to any Series of Bonds. The Borrower may at any time, upon notice to
the Issuer, deliver to the Trustee a Liquidity Facility effective at the start of a Rate
Period, or at another time consistent with the Indenture, subject to the conditions set
forth in this Section 5.13 and in Section 5.15 and to the requirements of the Indenture.
Not
less than thirty (30) days prior to the delivery of a Liquidity Facility with respect to a
Series of Bonds, the Borrower shall (i) deliver to the Trustee and the Remarketing
Agent a written commitment for the delivery of such Liquidity Facility, (ii) inform
the Trustee and the Remarketing Agent of the date on which the Liquidity Facility will
become effective and (iii) inform the Trustee of the rating expected to apply to such
Series of Bonds after the related Liquidity Facility is delivered. On or prior to the date
of the delivery of a Liquidity Facility to the Trustee, the Borrower shall cause to be
furnished to the Trustee and the Issuer (i) an opinion of Bond Counsel to the effect
that the delivery of such Liquidity Facility to the Trustee is authorized under the
Indenture and complies with the terms hereof and thereof and will not adversely affect the
Tax-Exempt status of the Bonds and (ii) an opinion to the effect that the Liquidity
Facility is exempt from registration under the Securities Act of 1933, as amended, and is
enforceable in accordance with its terms, except to the extent that enforceability thereof
may be limited by bankruptcy, reorganization or similar laws limiting the enforceability
of creditors’ rights generally and except that no opinion need be expressed as to the
availability of any discretionary equitable rights.
SECTION 5.14
Letter of Credit
. At the
time of their initial issuance and delivery, the Series 2003A Bonds and the Series 2003B
Bonds will each be secured by an Initial Letter of Credit. Thereafter, the Borrower may at
any time, upon notice to the Issuer,
15
deliver a Letter of Credit in respect of any Series
of Bonds at the start of a Rate Period, or at another time consistent with the Indenture,
subject to the conditions set forth in this Section 5.14 and in Section 5.15 and to the
requirements of the Indenture.
Not
less than thirty (30) days prior to the delivery of a Letter of Credit with respect to a
Series of Bonds, the Borrower shall (i) deliver to the Trustee and the Remarketing
Agent a written commitment for the delivery of such Letter of Credit, (ii) inform the
Trustee and the Remarketing Agent of the date on which the Letter of Credit will become
effective and (iii) inform the Trustee of the rating expected to apply to such Series
of Bonds after the related Letter of Credit is delivered. On or prior to the date of the
delivery of a Letter of Credit to the Trustee, the Borrower shall cause to be furnished to
the Trustee and the Issuer (i) an opinion of Bond Counsel to the effect that the
delivery of such Letter of Credit to the Trustee is authorized under the Indenture and
complies with the terms hereof and thereof and will not adversely affect the Tax-Exempt
status the Bonds and (ii) an opinion to the effect that the Letter of Credit is
exempt from registration under the Securities Act of 1933, as amended, and is enforceable
in accordance with its terms, except to the extent that enforceability thereof may be
limited by bankruptcy, reorganization or similar laws limiting the enforceability of
creditors’ rights generally and except that no opinion need be expressed as to the
availability of any discretionary equitable rights.
If
a Letter of Credit is already in effect with respect to a Series of Bonds, upon delivery
of a new Letter of Credit pursuant to this Section 5.14 with respect to such Series of
Bonds, the provider of the new Letter of Credit shall refund to the provider of the
existing Letter of Credit the purchase price of all Outstanding Bank Bonds, including any
accrued and unpaid interest on such Bank Bonds, calculated as set forth in the
Reimbursement Agreement relating to the existing Letter of Credit, unless the Borrower
pays such purchase price and interest directly to the Bank.
SECTION 5.15
Requirement to Deliver
Letter of Credit or Liquidity Facility Under Certain Circumstances
. Unless otherwise
authorized by the Issuer, the Borrower must, upon (i) any Expiration Date relating to any
Series of Bonds, if the Bonds of such Series will, immediately after such Expiration Date,
bear interest at a Daily Rate, a Weekly Rate or a Flexible Rate or (ii) any change in Rate
Period to a Daily Rate Period, Weekly Rate Period or Flexible Rate Period, other than a
change from a Weekly Rate Period to a Daily Rate Period or from a Daily Rate Period to a
Weekly Rate Period, deliver a Letter of Credit or Liquidity Facility conforming with the
requirements of Section 5.13 or 5.14, as applicable, together with written evidence from
each Rating Agency then rating the Bonds of such Series that, following the delivery of
such Letter of Credit or Liquidity Facility, the rating on such Series of Bonds shall not
be lower than A-1, P-1 or F-1, as applicable, or the current short-term rating from such
Rating Agency will not be reduced or withdrawn.
SECTION 5.16
Bond Insurance
. At the
time of initial issuance and delivery of the Bonds, there is no Bond Insurance in effect
with respect to any Series of Bonds. The Borrower may at any time, upon notice to the
Issuer, deliver to the Trustee Bond Insurance effective at the start of a Rate Period, or
at another time consistent with the Indenture, subject to the conditions set forth in this
Section 5.16 and to the requirements of the Indenture.
16
Not
less than thirty (30) days prior to the delivery of any Bond Insurance with respect to a
Series of Bonds, the Borrower shall (i) deliver to the Trustee, the Remarketing Agent
and the Auction Agent a written commitment for the delivery of such Bond Insurance,
(ii) inform the Trustee, the Remarketing Agent and the Auction Agent of the date on
which the Bond Insurance will become effective and (iii) inform the Trustee of the
rating expected to apply to such Series of Bonds after the related Bond Insurance is
delivered. On or prior to the date of the delivery of any Bond Insurance to the Trustee,
the Borrower shall cause to be furnished to the Trustee and the Issuer (i) an opinion
of Bond Counsel to the effect that the delivery of such Bond Insurance to the Trustee is
authorized under the Indenture and complies with the terms hereof and thereof and will not
adversely affect the Tax-Exempt status of the Bonds and (ii) an opinion to the effect
that the Bond Insurance is exempt from registration under the Securities Act of 1933, as
amended, and is enforceable in accordance with its terms, except to the extent that
enforceability thereof may be limited by bankruptcy, reorganization or similar laws
limiting the enforceability of creditors’ rights generally and except that no opinion
need be expressed as to the availability of any discretionary equitable rights.
ARTICLE VI
EVENTS OF DEFAULT AND
REMEDIES
SECTION 6.1
Events of Default
Defined
. The following events shall be Events of Default under this Agreement with respect
to any Series of Bonds, and the terms “Event of Default” or “Events of
Default” shall mean, whenever they are used in this Agreement, any one or more of the
following events:
(a)
Failure by the Borrower to pay when due any amounts required to be paid under
Section 4.2(a) or 4.2(b) hereof with respect to such Series of Bonds; or
(b)
Failure by the Borrower 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) above, for a period of ninety (90) 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
Borrower by the Trustee or to the Borrower 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 the fact of such non-correction,
corrective action or diligent pursuit is evidenced to the Trustee by a
certificate of an Authorized Borrower Representative; or
(c)
A proceeding or case shall be commenced, without the application or consent of
the Borrower, 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 Borrower 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
17
decree approving or ordering any of the foregoing shall be entered
and shall continue in effect for a period of ninety (90) days; or an order for
relief against the Borrower shall be entered against the Borrower in an
involuntary case under the United States Bankruptcy Code (as now or hereafter in
effect) or other applicable law; or
(d)
The Borrower 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 United States 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 United States Bankruptcy Code or other applicable law; or
(e)
Dissolution or liquidation of the Borrower; provided that the term
“dissolution or liquidation of the Borrower” shall not be construed to
include the cessation of the corporate existence of the Borrower resulting
either from a merger or consolidation of the Borrower into or with another
corporation or a dissolution or liquidation of the Borrower following a transfer
of all or substantially all of its assets as an entirety, under the conditions
permitting such actions contained in Section 5.2 hereof; or
(f)
The occurrence of an “Event of Default” under the Indenture (other
than an Event of Default described in Section 9.01(e) thereof) with respect to
such Series of Bonds; or
(g)
Receipt by the Trustee from any Bond Insurer, Bank or Liquidity Provider of
notice of the occurrence of an “event of default” relating to the Bond
Insurance or under the Reimbursement Agreement or Liquidity Facility with
respect to such Series of Bonds.
The
foregoing provisions of Section 6.1(b) are subject to the following limitations: If by
reason of Force Majeure the Borrower 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
Borrower contained in Article IV and Section 6.4 hereof the Borrower shall not be deemed
in default during the continuance of such inability. The Borrower agrees, however, to
remedy with all reasonable dispatch the cause or causes preventing the Borrower from
carrying out its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Borrower and the
Borrower 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 Borrower unfavorable to the Borrower.
18
SECTION 6.2
Remedies on Default
.
Subject to the rights of any Bond Insurer or Bank (except in the event of an Insurer
Default or Bank Default, respectively), whenever any Event of Default referred to in
Section 6.1 hereof shall have occurred and be continuing,
(a)
The Trustee may, to the extent and in the manner set forth in Section 9.02 of
the Indenture, by notice in writing to the Borrower declare the unpaid
indebtedness under Section 4.2(a) hereof with respect to any Series of Bonds to
be due and payable immediately, if concurrently with or prior to such notice the
unpaid principal amount of the Bonds of such Series 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 and premium, if any, and interest accrued on the
Bonds of such Series) shall become and shall be immediately due and payable as
liquidated damages.
(b)
The Issuer or the Trustee may take whatever action at law or in equity may
appear necessary or desirable to collect the payments and other amounts then due
and thereafter to become due hereunder or to enforce performance and observance
of any obligation, agreement or covenant of the Borrower hereunder; provided,
however, that nothing in Section 4.4 hereof shall be deemed to limit the rights
of the Issuer under this Section 6.2(b); provided, nevertheless, that the Issuer
will not exercise any remedies, with respect to any of the Issuer’s rights
assigned to the Trustee pursuant to Section 4.4 hereof unless, in the
Issuer’s reasonable judgment and after written request to a Responsible
Officer of the Trustee, the Trustee has failed to enforce such rights. The
Issuer has no obligation to take any action under this Section.
(c)
Upon the occurrence of an Event of Default described in Section 6.1(a) hereof
with respect to any Series of Bonds, the Trustee shall immediately draw upon any
Bond Insurance, Liquidity Facility or Letter of Credit with respect to such
Series of Bonds, if permitted by the terms thereof and required by the terms of
the Indenture, and apply the amount so drawn in accordance with the Indenture
and may exercise any remedy available to it thereunder.
The
provisions of clause (a) of the preceding paragraph are subject to the condition that if,
at any time after the unpaid indebtedness under Section 4.2(a) hereof with respect to any
Series of Bonds shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, there shall have been deposited with the Trustee a sum sufficient to
pay all the principal of the Bonds of such Series matured prior to such declaration and
all matured installments of interest (if any) upon all the Bonds of such Series, with
interest on such overdue installments of principal as provided herein, and the reasonable
expenses of the Trustee and the Issuer, and any and all other defaults known to the
Trustee (other than in the payment of principal of and interest on the Bonds of such
Series due and payable solely by reason of such declaration) shall have been made good or
cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate
shall have been made therefor, then, and in every such case, the Trustee shall, on behalf
of the Owners of all the Bonds of such Series, with the consent of the Bank or the Bond
Insurer with respect to such Series of Bonds (except in the event of a Bank Default or
Insurer Default with respect to such Series of Bonds), rescind and annul such declaration
and its consequences and waive such default; provided that no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall impair or
exhaust any right or power consequent thereon.
19
In
case the Trustee or the Issuer, as the case may be, shall have proceeded to enforce its
rights under this Agreement, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Trustee or the
Issuer, then, and in every such case, the Borrower, the Trustee and the Issuer shall be
restored respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Borrower, the Trustee and the Issuer shall continue as though
no such action had been taken.
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 Borrower from the Borrower’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 shareholder, past, present or future, of the Borrower as such, either directly or
through the Borrower, 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, including, without limitation, the last two paragraphs of this
Section 6.2, shall be construed to prevent the Issuer from enforcing directly any of
its rights under Section 5.1 hereof and under Sections 4.2(d), 4.2(e), 4.2(h) and 6.4
hereof.
In
case proceedings shall be pending for the bankruptcy or for the reorganization of the
Borrower under the federal bankruptcy laws or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Borrower or in the
case of any other similar judicial proceedings relative to the Borrower, or the creditors
or property of the Borrower, then the Trustee shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or claims for the
whole amount owing and unpaid pursuant to this Agreement and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee allowed in such judicial
proceedings relative to the Borrower, its creditors or its property, and to collect and
receive any moneys or other property payable or deliverable on any such claims, and to
distribute such amounts as provided in the Indenture after the deduction of its reasonable
charges and expenses. Any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized to make such payments to the Trustee, and to pay to the Trustee any
amount due if for reasonable compensation and expenses, including reasonable expenses and
fees of counsel incurred by it up to the date of such distribution.
Anything
in this Agreement to the contrary notwithstanding, upon the occurrence and continuance of
an Event of Default with respect to any Series of Bonds supported by Bond Insurance,
except in the event of an Insurer Default applicable to a particular Bond Insurer, the
Bond Insurer providing Bond Insurance in respect of such Series of Bonds shall be entitled
to control and direct the enforcement of all rights and remedies granted to the Issuer,
the Bondholders or the Trustee in respect of such Series of Bonds for the benefit of the
Bondholders hereunder covered by such Bond Insurance, including, without limitation:
(i) the right to accelerate the payment, in the manner described in subsection (a) of
this Section 6.2, of that portion of the Borrower’s indebtedness hereunder
attributable to such Series of Bonds and
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(ii) the right to annul any declaration of
acceleration relating to the Borrower’s indebtedness hereunder attributable to such
Series of Bonds, and the Bond Insurer shall also be entitled to approve all waivers of
Events of Default hereunder in respect of such Series of Bonds.
Anything
in this Agreement to the contrary notwithstanding, upon the occurrence and continuance of
an Event of Default with respect to any Series of Bonds supported by a Letter of Credit,
except in the event of a Bank Default applicable to a particular Bank, the Bank providing
the Letter of Credit in respect of such Series of Bonds shall be entitled to control and
direct the enforcement of all rights and remedies granted to the Issuer, the Bondholders
or the Trustee in respect of such Series of Bonds for the benefit of the Bondholders
hereunder covered by such Letter of Credit, including, without limitation: (i) the right
to accelerate the payment, in the manner described in subsection (a) of this Section 6.2,
of that portion of the Borrower’s indebtedness hereunder attributable to such Series
of Bonds and (ii) the right to annul any declaration of acceleration relating to the
Borrower’s indebtedness hereunder attributable to such Series of Bonds, and the Bank
shall also be entitled to approve all waivers of Events of Default hereunder in respect of
such Series of Bonds.
SECTION 6.3
No Remedy Exclusive
. No
remedy herein conferred upon or reserved to the Issuer or the Trustee 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. Such rights and remedies as are given the Issuer hereunder shall also extend to
the Trustee and the Owners of the Bonds, subject to the provisions of the Indenture, and
the Trustee and Owners of the Bonds 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 Borrower 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 Borrower
herein contained, the Borrower 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 reasonable expenses so incurred by or on behalf of the
Issuer or the Trustee. If the circumstances set forth in this Section 6.4 shall occur with
the result that the Borrower is obligated to make payments to the Trustee under this
Section 6.4, and so long as such obligation shall be continuing, in order to secure such
obligation of the Borrower to the Trustee, the Trustee shall have a lien prior to the
Bonds on all moneys held by the Trustee under the Indenture except those moneys held in
trust to pay the principal of and premium, if any, and interest on, or the purchase price
of, particular Bonds and except for moneys, if any, in the Rebate Fund. If the Trustee
incurs fees and expenses in connection with a default specified in Section 6.1(c), 6.1(d)
or 6.1(e) of this Agreement, such fees and expenses are understood to include expenses of
administration under any bankruptcy law.
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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 Borrower without the consent of the Trustee. The Trustee shall have power
to waive any default by the Borrower hereunder, except a default under Sections 4.2(d),
4.2(e), 4.2(h) or 6.4, without the prior written concurrence of the Issuer.
ARTICLE VII
OPTION AND OBLIGATION
OF BORROWER TO PREPAY
SECTION 7.1
Option to Prepay
. The
Borrower 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 the 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 Borrower elects to provide for the redemption of Bonds as
permitted by this Section, the Borrower 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.
SECTION 7.2
Obligation to Prepay
. The
Borrower shall be obligated to prepay amounts due hereunder, in whole or in part, to
provide for the redemption of Bonds in whole or in part pursuant to the provisions of
Section 3.01(B) of the Indenture. In the case of any of the events stated in Section
3.01(B) of the Indenture, the Borrower must satisfy its obligation by prepaying within 180
days after such event.
SECTION 7.3
Notice of Prepayment;
Amount to be Prepaid
. (a) In order to exercise the option granted to the
Borrower in Section 7.1 hereof, or fulfill an obligation described in Section 7.2 hereof,
the Borrower shall give at least 30 days written notice of such prepayment to the Issuer,
the Trustee, the Auction Agent and the Remarketing Agent. On the date fixed for redemption
of the Bonds or portions thereof, there shall be deposited with the Trustee from payments
by the Borrower as required by Section 7.l or 7.2, as appropriate, for payment into the
Bond Fund the amount required in subsection (b) of this Section. The notice shall provide
for the date of the application of the prepayment made by the Borrower hereunder to the
redemption of the Bonds or portions thereof in whole or in part pursuant to call for
redemption, shall specify the redemption date and shall be given to the Trustee, the
Issuer, the Auction Agent and the Remarketing Agent in accordance with the provisions of
the Indenture for the redemption of Bonds or portions thereof.
(b)
The prepayment payable by the Borrower hereunder upon either (i) the exercise of
the option granted to the Borrower in Section 7.1 hereof, or (ii) the
fulfillment of an obligation specified in Section 7.2 shall be, to the extent
applicable and except as otherwise provided in Article VIII of the
Indenture, the sum of the following:
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