EXHIBIT 4b
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CITY OF FARMINGTON,
NEW MEXICO
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ORDINANCE NO. 97-1055
ADOPTED APRIL 17, 1997
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AUTHORIZING
POLLUTION CONTROL REVENUE BONDS,
1997 SERIES A
(TUCSON ELECTRIC POWER COMPANY SAN JUAN PROJECT)
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TABLE OF CONTENTS
Page
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Title . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clause . . . . . . . . . . . . . . . . . . . . 2
ARTICLE I
DEFINITIONS; FINDINGS, DECLARATIONS, DETERMINATIONS,
APPROVALS AND AUTHORIZATIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . 3
Section 1.02. Findings, Declarations, Determinations,
Approvals and Authorizations . . . . . . . 10
ARTICLE II
THE BONDS
Section 2.01. Creation of Bonds. . . . . . . . . . . . . . . 11
Section 2.02. Form of Bonds. . . . . . . . . . . . . . . . . 11
Section 2.03. Execution of Bonds. . . . . . . . . . . . . . 12
Section 2.04. Authentication of Bonds. . . . . . . . . . . . 12
Section 2.05. Bonds Not General Obligations . . . . . . . . 12
Section 2.06. Prerequisites to Authentication of Bonds. . . 13
Section 2.07. Lost or Destroyed Bonds or Bonds Canceled in
Error . . . . . . . . . . . . . . . . . . . . 13
Section 2.08. Transfer, Registration and Exchange of Bonds . 14
Section 2.09. Other Obligations . . . . . . . . . . . . . . 15
Section 2.10. Temporary Bonds . . . . . . . . . . . . . . . 15
Section 2.11. Cancellation of Bonds . . . . . . . . . . . . 15
Section 2.12. Payment of Principal and Interest . . . . . . 15
Section 2.13. Bonds Equally Secured . . . . . . . . . . . . 16
Section 2.14. Applicability of Book-Entry Provisions . . . . 16
ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption Provisions . . . . . . . . . . . . 16
Section 3.02. Selection of Bonds to be Redeemed . . . . . . 17
Section 3.03. Procedure for Redemption . . . . . . . . . . . 18
Section 3.04. No Partial Redemption After Default . . . . . 18
Section 3.05. Payment of Redemption Price . . . . . . . . . 18
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* This table of contents is not a part of the Ordinance, 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 Ordinance.
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ARTICLE IV
THE BOND FUND
Section 4.01. Creation of Bond Fund . . . . . . . . . . . . 19
Section 4.02. Liens . . . . . . . . . . . . . . . . . . . . 19
Section 4.03. Deposits into Bond Fund . . . . . . . . . . . 19
Section 4.04. Use of Moneys in Bond Fund . . . . . . . . . . 19
Section 4.05. Custody of Bond Fund; Withdrawal of Moneys . . 19
Section 4.06. Bonds Not Presented for Payment . . . . . . . 19
Section 4.07. Moneys Held in Trust . . . . . . . . . . . . . 20
ARTICLE V
DISPOSITION OF PROCEEDS
Section 5.01. Disposition of Proceeds. . . . . . . . . . . . 20
ARTICLE VI
INVESTMENTS
Section 6.01. Investments . . . . . . . . . . . . . . . . . 20
ARTICLE VII
GENERAL COVENANTS
Section 7.01. No General Obligations . . . . . . . . . . . . 21
Section 7.02. Performance of Covenants of the City;
Representations . . . . . . . . . . . . . . . 21
Section 7.03. Maintenance of Rights and Powers; Compliance with
Laws . . . . . . . . . . . . . . . . . . . . 21
Section 7.04. Enforcement of Obligations of the Company;
Amendments . . . . . . . . . . . . . . . . . 21
Section 7.05. Further Instruments. . . . . . . . . . . . . . 21
Section 7.06. No Disposition of Trust Estate. . . . . . . . 22
Section 7.07. Financing Statements. . . . . . . . . . . . 22
Section 7.08. Tax Covenants; Rebate Fund. . . . . . . . . . 22
Section 7.09. Notices of Trustee. . . . . . . . . . . . . . 23
ARTICLE VIII
DEFEASANCE
Section 8.01. Defeasance. . . . . . . . . . . . . . . . . . 23
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.01. Events of Default. . . . . . . . . . . . . . . 24
Section 9.02. Remedies. . . . . . . . . . . . . . . . . . . 25
Section 9.03. Restoration to Former Position. . . . . . . . 25
Section 9.04. Owners' Right to Direct Proceedings. . . . . . 25
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Section 9.05. Limitation on Owners' Right to Institute
Proceedings. . . . . . . . . . . . . . . . . 26
Section 9.06. No Impairment of Right to Enforce Payment. . . 26
Section 9.07. Proceedings by Trustee without Possession of
Bonds. . . . . . . . . . . . . . . . . . . . 26
Section 9.08. No Remedy Exclusive. . . . . . . . . . . . . . 26
Section 9.09. No Waiver of Remedies. . . . . . . . . . . . . 26
Section 9.10. Application of Moneys. . . . . . . . . . . . . 27
Section 9.11. Severability of Remedies. . . . . . . . . . . 27
Section 9.12. No Obligation of City to Act. . . . . . . . . 27
ARTICLE X
TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR
Section 10.01. Acceptance of Trusts. . . . . . . . . . . . . 28
Section 10.02. No Responsibility for Recitals. . . . . . . . 28
Section 10.03. Limitations on Liability. . . . . . . . . . . 28
Section 10.04. Compensation, Expenses and Advances. . . . . . 28
Section 10.05. Notice of Events of Default. . . . . . . . . . 29
Section 10.06. Action by Trustee. . . . . . . . . . . . . . . 29
Section 10.07. Good Faith Reliance. . . . . . . . . . . . . . 29
Section 10.08. Dealings in Bonds and with the City and the
Company. . . . . . . . . . . . . . . . . . . 29
Section 10.09. Allowance of Interest. . . . . . . . . . . . . 30
Section 10.10. Construction of Ordinance. . . . . . . . . . . 30
Section 10.11. Resignation of Trustee. . . . . . . . . . . . 30
Section 10.12. Removal of Trustee. . . . . . . . . . . . . . 30
Section 10.13. Appointment of Successor Trustee. . . . . . . 30
Section 10.14. Qualifications of Successor Trustee. . . . . . 31
Section 10.15. Judicial Appointment of Successor Trustee. . . 31
Section 10.16. Acceptance of Trusts by Successor Trustee. . . 31
Section 10.17. Successor by Merger or Consolidation. . . . . 31
Section 10.18. Standard of Care. . . . . . . . . . . . . . . 32
Section 10.19. Notice to Owners of Bonds of Event of Default. 32
Section 10.20. Intervention in Litigation of the City. . . . 32
Section 10.21. Paying Agent; Co-Paying Agents. . . . . . . . 32
Section 10.22. Qualifications of Paying Agent and Co-Paying
Agents;
Resignation; Removal. . . . . . . . . . . . . 32
Section 10.23. Registrar. . . . . . . . . . . . . . . . . . . 33
Section 10.24. Qualifications of Registrar; Resignation;
Removal. . . . . . . . . . . . . . . . . . . 33
Section 10.25. Several Capacities. . . . . . . . . . . . . . 34
ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
PROOF OF OWNERSHIP OF BONDS
Section 11.01. Execution of Instruments;
Proof of Ownership . . . . . . . . . . . . 34
ARTICLE XII
MODIFICATION OF THIS ORDINANCE AND THE SALE AGREEMENT
Section 12.01. Limitations. . . . . . . . . . . . . . . . . . 34
Section 12.02. Supplemental Ordinances without Owner Consent. 35
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Section 12.03. Supplemental Ordinances with Consent of Owners.
35
Section 12.04. Effect of Supplemental Ordinance. . . . . . . 36
Section 12.05. Consent of the Company. . . . . . . . . . . . 36
Section 12.06. Amendment of Sale Agreement without Consent of
Owners. . . . . . . . . . . . . . . . . . . . 37
Section 12.07. Amendment of Sale Agreement with Consent of
Owners. . . . . . . . . . . . . . . . . . . . 37
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Successors of the City. . . . . . . . . . . . 37
Section 13.02. Parties in Interest. . . . . . . . . . . . . . 37
Section 13.03. Ratification of Prior Action. . . . . . . . . 38
Section 13.04. Severability. . . . . . . . . . . . . . . . . 38
Section 13.05. No Personal Liability of City Officials. . . . 38
Section 13.06. Bonds Owned by the City or the Company. . . . 38
Section 13.07. Acceptance by Trustee. . . . . . . . . . . . . 38
Section 13.08. Governing Law. . . . . . . . . . . . . . . . . 38
Section 13.09. Notices. . . . . . . . . . . . . . . . . . . . 38
Section 13.10. Holidays. . . . . . . . . . . . . . . . . . . 39
Section 13.11. Emergency Circumstances . . . . . . . . . . . 39
Signatures and Seals . . . . . . . . . . . . . . . . . . . . 40
Acceptance of Duties by the Trustee . . . . . . . . . . . . . 40
Exhibit A Form of Bond . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Endorsement of Transfer . . . . . . . . . . B-1
Exhibit C Form of Certificate of Authentication . . . . . . . C-1
ORDINANCE NO. 97-1055
An Ordinance authorizing and providing for the issuance by
the City of Farmington, New Mexico of an issue of its revenue
bonds designated "Pollution Control Revenue Bonds, 1997 Series A
(Tucson Electric Power Company San Juan Project)" to be issued
pursuant to the provisions of the Pollution Control Revenue Bond
Act, Chapter 397, Laws of 1973 of the State of New Mexico, 31st
Legislature, 1st Session, as amended, for the purpose of
refunding certain outstanding revenue bonds issued under such Act
the proceeds of which were used to finance certain costs of the
acquisition, construction and installation of projects consisting
of undivided interests in certain air and water pollution control
facilities at the San Juan Generating Station, an electric power
generating plant located in San Juan County, New Mexico,
undivided interests in which are owned by Tucson Electric Power
Company, a corporation organized and existing under the laws of
the State of Arizona, formerly known as Tucson Gas & Electric
Company, said revenue bonds to be payable by the City solely from
the revenues payable to the City by Tucson Electric Power Company
pursuant to a certain Amended and Restated Installment Sale
Agreement dated as of April 1, 1997 between the City, as Vendor,
and Tucson Electric Power Company, as Vendee, and certain other
moneys pledged therefor hereunder, said revenue bonds never to
constitute an indebtedness of the City within the meaning of any
State constitutional provision or statutory limitation, and never
to constitute or give rise to a pecuniary liability of the City
or a charge against its general credit or taxing powers and
declaring an emergency.
WHEREAS, the City of Farmington, an incorporated
municipality, a body politic and corporate, existing under the
Constitution and laws of the State of New Mexico (hereinafter
called the "City"), is authorized and empowered under the
Pollution Control Revenue Bond Act, Chapter 397, Laws of 1973 of
the State of New Mexico, 31st Legislature, 1st Session, as
amended (the "Act") to issue revenue bonds for and to acquire,
whether by construction, purchase, gift or lease, one or more
projects consisting of any land, interest in land, building,
structure, facility, system, fixture, improvement, appurtenance,
machinery, equipment or any combination thereof, or any interest
in any one or more of the foregoing, whether or not presently in
existence or under construction, used by an individual,
partnership, firm, company, corporation (including a public
utility), association, trust, estate, political subdivision,
state agency or any other legal entity, or its legal
representative, agent or assigns, substantially for the
reduction, abatement or prevention of pollution including, but
not limited to, the removal of pollutants, contaminants or
foreign substances from land, air or water, or for the removal or
treatment of any substance in a processed material which would
otherwise cause pollution when such material is used, provided
that any such project shall be located within the State of New
Mexico and within or without or partially within or without the
City, but not more than fifteen miles outside of the corporate
limits of the City (or that, if there is no municipality within
fifteen miles of the project, the City is in the county in which
the project is or may be located) and to sell or lease or
otherwise dispose of any or all of such projects upon such terms
and conditions as the governing body of the City (hereinafter
called the "City Council") may deem advisable and as shall not
conflict with the provisions of the Act; and
WHEREAS, the City is authorized and empowered under the Act
to issue revenue bonds to refund bonds issued and outstanding
under the Act; and
WHEREAS, on August 28, 1973, the City Council adopted
Resolution Number 709 ("Resolution No. 709") determining to issue
and, subject to certain conditions, agreeing to issue revenue
bonds under the Act to finance the costs to Tucson Electric Power
Company formerly known as Tucson Gas & Electric Company, a
corporation organized and existing under the laws of the State of
Arizona (the "Company"), of certain facilities for the reduction,
abatement or prevention of pollution caused by the operation of
the San Juan Generating Station, an electric power generating
plant located in San Juan County, New Mexico, including
facilities for the reduction, abatement or prevention of
pollution caused by the operation of Units 1 and 2 of such
generating station (the "Facilities") and authorizing the Mayor
of the City to execute and deliver preliminary agreements
relating thereto and, subject to certain conditions, to take such
steps and actions as required or necessary in order to issue such
revenue bonds, and a Preliminary Agreement (the "Original
Preliminary Agreement"), in the form contemplated by Resolution
No. 709, was executed and delivered by the City and the Company;
and
WHEREAS, on November 27, 1973, the City Council adopted
Resolution Number 721 ("Resolution No. 721") in order to
authorize consideration of the adoption of a proposed ordinance
in order to, among other matters, increase the aggregate amount
of revenue bonds authorized to be issued by the City to finance
the costs to the Company of the acquisition, construction and
installation of the Facilities; and
WHEREAS, on August 13, 1974, the City Council adopted
Resolution Number 751 ("Resolution No. 751") authorizing the
Mayor of the City to execute and deliver certain amendments to
the Original Preliminary Agreement in order to, among other
matter, further increase the aggregate amount of revenue bonds
authorized to be issued by the City to finance the costs to the
Company of the acquisition, construction and installation of the
Facilities; and
WHEREAS, a supplemental preliminary agreement (the
"Supplemental Preliminary Agreement", and, together with the
Original Preliminary Agreement and Resolution No. 721,
hereinafter collectively referred to as the "Preliminary
Agreement"), in the form contemplated by Resolution No. 751, was
executed and delivered by the City and the Company on August 13,
1974; and
WHEREAS, the City has heretofore issued and sold $55,000,000
aggregate principal amount of its Pollution Control Revenue
Bonds, Series 1973 (Tucson Gas & Electric Company San Juan
Project), of which $47,910,000 remain outstanding (the "1973
Bonds"), the proceeds of which were to be used to finance a
portion of the costs to the Company of the acquisition,
construction and installation of the Facilities described in
Exhibit A of that certain Installment Sale Agreement, dated as of
December 1, 1973, as amended and supplemented pursuant to the
terms thereof prior to the date hereof (the "Series 1973
Installment Sale Agreement"), between the City, as Vendor, and
Public Service Company of New Mexico and the Company, as Vendees;
and
WHEREAS, Public Service Company of New Mexico has redeemed
the pollution control revenue bonds secured by revenues derived
pursuant to the Series 1973 Installment Sale Agreement and its
obligations and rights pursuant thereto have been discharged so
that the Company remains as the sole Vendee pursuant thereto; and
WHEREAS, the City has also heretofore issued and sold
$32,500,000 aggregate principal amount of its Collateralized
Pollution Control Revenue Bonds, 1977 Series A (Tucson Gas &
Electric Company San Juan Project), of which $32,500,000 remain
outstanding (the "1977 Bonds") (the 1973 Bonds and the 1977
Bonds, collectively, the "Prior Bonds"), the proceeds of which
were to be used to finance a portion of the costs to the Company
of the acquisition, construction and installation of the
Facilities described in Exhibit A of that certain Installment
Sale Agreement, dated as of November 1, 1977, as amended and
supplemented pursuant to the terms thereof prior to the date
hereof (the "Series 1977 Installment Sale Agreement"), between
the City, as Vendor, and the Company, as Vendee; and
WHEREAS, the Company has requested the City to consider
taking steps, in accordance with the Preliminary Agreement,
necessary for the issuance of revenue bonds under the Act, the
proceeds of which revenue bonds are to be used to refund and
redeem the Prior Bonds; and
WHEREAS, the City is adopting a resolution approving and
authorizing the execution and delivery by the Mayor and the City
Clerk of the City, on behalf of the City, of that certain Amended
and Restated Installment Sale Agreement, dated as of April 1,
1997 (hereinafter called the "Sale Agreement"), between the City,
as Vendor, and the Company as Vendee, which amends and restates
in their entirety the Series 1973 Installment Sale Agreement, and
the Series 1977 Installment Sale Agreement (each, an "Original
Sale Agreement", and hereinafter collectively referred to as the
"Original Sale Agreements"); and
WHEREAS, the Sale Agreement restates the prior sale by the
Company of its undivided interest in the Facilities described in
Exhibit A to each of the Original Sale Agreements to the City and
the prior sale back by the City of its interest in the
Facilities, and sets forth the undertaking by the City to issue
and sell its issue of revenue bonds designated "Pollution Control
Revenue Bonds, 1997 Series A (Tucson Electric Power Company San
Juan Project) (hereinafter called the "Bonds"), if and when
authorized by the City pursuant to this Ordinance, the proceeds
of the Bonds (except for accrued interest, if any) to be used to
refund and redeem the Prior Bonds; and
WHEREAS, pursuant to the Sale Agreement referred to in the
preceding clause, the Company will release the City and will
agree that the City shall not be liable for, and will agree to
indemnify and hold the City harmless from, certain matters; and
WHEREAS, certain findings and determinations relating to the
Sale Agreement and the Facilities have heretofore been made and
are set forth in this Ordinance; and
WHEREAS, this Ordinance shall serve as an indenture of
trust.
NOW, THEREFORE,
BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF
FARMINGTON, NEW MEXICO that the City, in consideration of the
covenants herein contained and of the purchase and acceptance of
the Bonds by the Owners thereof, and in order to secure the
payment of all Bonds at any time outstanding under this
Ordinance, according to their tenor and effect, and the
performance and observance of all the covenants and conditions in
the Bonds and herein contained, and to declare the terms and
conditions upon and subject to which the Bonds are issued and
secured, does grant, pledge and assign to the Trustee (as
hereinafter defined), and to its successors and assigns forever,
upon written acceptance of this Ordinance by the Trustee, the
Trust Estate (as hereinafter defined) for the equal and
proportionate benefit, security and protection of all holders and
owners of the Bonds issued under and secured by this Ordinance
without privilege, priority or distinction as to the lien or
otherwise of any of the Bonds over any other of the Bonds, all
upon the terms stated in this Ordinance.
ARTICLE I
DEFINITIONS; FINDINGS, DECLARATIONS, DETERMINATIONS,
APPROVALS AND AUTHORIZATIONS
Section 1.01. Definitions. The terms defined in this
Article I shall, for all purposes of this Ordinance, have the
meanings herein specified, unless the context clearly requires
otherwise:
Act:
"Act" shall mean the Pollution Control Revenue Bond Act,
Chapter 397, Laws of 1973 of the State of New Mexico, 31st
Legislature, 1st Session, as amended by Chapter 312, Laws of 1977
of the State of New Mexico, 33rd Legislature, 1st Session, by
Chapter 181, Laws of 1978 of the State of New Mexico, 33rd
Legislature, 2nd Session, and by Chapter 114, Laws of 1983 of the
State of New Mexico, 36th Legislature, 1st Session, and all acts
supplemental thereto or amendatory thereof.
Administration Expenses:
"Administration Expenses" shall mean the reasonable expenses
incurred by the City with respect to the Sale Agreement, this
Ordinance and any transaction or event contemplated by the Sale
Agreement or this Ordinance, including the compensation and
reimbursement of expenses and advances payable to the Trustee, to
the Paying Agent, any Co-Paying Agent and the Registrar.
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 City 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 City.
Bond Fund:
"Bond Fund" shall mean the fund created by Section 4.01 hereof.
Bonds:
"Bond" or "Bonds" shall mean the bonds authorized to be
issued under this Ordinance.
City:
"City" shall mean the City of Farmington, in the County of
San Juan, an incorporated municipality, a body politic and
corporate, existing under the Constitution and laws of the State
of New Mexico, and its successors and their assigns.
City Council:
"City Council" shall mean the City Council of the City or
the board or other body in which general legislative powers of
the City subsequently may be vested.
Code:
"Code" shall mean the Internal Revenue Code of 1986 or any
successor statute thereto. Each reference to a section of the
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 Code
section shall, in the event of a successor Code, be deemed to be
a reference to the successor to such Code section.
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 7.02 of
the Sale Agreement to the extent of the obligations assumed
thereunder.
Depositary:
"Depositary" shall mean The Depository Trust Company or any
successor thereto as a securities repository for the Bonds.
Facilities:
"Facilities" shall mean the systems and facilities for the
reduction, abatement or prevention of pollution caused by the
operation of the Plant which are described in Exhibit A to the
Sale Agreement, as from time to time amended or modified, and
related improvements.
Government Obligations:
"Government Obligations" shall mean:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States of America entitled to the benefit of the
full faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company organized under the laws of the United States
of America or of any state or territory thereof or of the
District of Columbia, with a combined capital stock surplus
and undivided profits of at least $50,000,000; and provided,
further, that except as may be otherwise required by law,
such custodian shall be obligated to pay to the holders of
such certificates, depositary receipts or other instruments
the full amount received by such custodian in respect of
such obligations or specific payments and shall not be
permitted to make any deduction therefrom.
Investment Securities:
"Investment Securities" shall mean any of the following
obligations or securities on which neither the Company nor any of
its subsidiaries is the obligor but only to the extent investment
in said obligations or securities is permitted by applicable law:
(a) Government Obligations; (b) interest bearing deposit accounts
(which may be represented by certificates of deposit) in
national, state or foreign banks having a combined capital and
surplus of not less than $10,000,000; (c) bankers' acceptances
drawn on and accepted by commercial banks having a combined
capital and surplus of not less than $10,000,000; (d) (i) direct
obligations of, (ii) obligations the principal of and interest on
which are unconditionally guaranteed by, and (iii) any other
obligations the interest on which is exempt from federal income
taxation issued by, any state of the United States of America,
the District of Columbia or the Commonwealth of Puerto Rico, or
any political subdivision, agency, authority or other
instrumentality of any of the foregoing, which, in any case, are
rated by a nationally recognized rating agency in any of its
three highest rating categories; (e) obligations of any agency or
instrumentality of the United States of America; (f) commercial
or finance company paper which is rated by a nationally
recognized rating agency in any of its three highest rating
categories; (g) corporate debt securities issued by corporations
having debt securities rated by a nationally recognized rating
agency in any of its three highest rating categories; (h)
repurchase agreements with banking or financial institutions
having a combined capital and surplus of not less than
$10,000,000 with respect to any of the foregoing obligations or
securities; (i) shares or interests in registered investment
companies whose assets consist of obligations or securities which
are described in any other clause of this sentence; and (j) any
other obligations which may lawfully be purchased by the Trustee.
The commercial banks and banking institutions referred to above
may include the entities acting as Trustee, Paying Agent,
Co-Paying Agent or Registrar hereunder if such entities shall
otherwise satisfy the requirements set forth above.
1954 Code:
"1954 Code" shall mean the Internal Revenue Code of 1954, as
amended.
1977 Bonds:
"1977 Bonds" shall mean the $32,500,000 aggregate principal
amount of the City's Collateralized Pollution Control Revenue
Bonds, 1977 Series A (Tucson Gas & Electric Company San Juan
Project), all of which remain outstanding.
1973 Bonds:
"1973 Bonds" shall mean the $55,000,000 aggregate principal
amount of the City's Pollution Control Revenue Bonds, Series 1973
(Tucson Gas & Electric Company San Juan Project), of which
$47,910,000 in principal amount remains outstanding.
Notice by Mail:
"Notice by Mail" or "notice" of any action or condition "by
Mail" shall mean a written notice meeting the requirements of
this Ordinance mailed by first-class mail to the Owners of
specified registered Bonds at the addresses shown in the
registration books maintained pursuant to Section 2.08 hereof;
provided, however, that if, because of the temporary or permanent
suspension of delivery of first-class mail or for any other
reason, it is impossible or impracticable to give such notice by
first-class mail, then such giving of notice in lieu thereof,
which may include publication, as shall be made with the approval
of the Trustee (or, if there be no trustee hereunder, the City)
shall constitute a sufficient giving of such notice.
Notice by Publication:
"Notice by Publication" or "notice" of any action or
condition "by Publication" shall mean publication of a notice
meeting the requirements of this Ordinance in a newspaper or
financial journal of general circulation in The City of New York,
New York, which carries financial news, is printed in the English
language and is customarily published on each business day;
provided, however, that any successive weekly publication of
notice required hereunder may be made, unless otherwise expressly
provided herein, on the same or different days of the week and in
the same or different newspapers or financial journals; and
provided, further, that if, because of the temporary or permanent
suspension of the publication or general circulation of any
newspaper or financial journal or for any other reason, it is
impossible or impracticable to publish such notice in the manner
herein described, then such publication in lieu thereof as shall
be made with the approval of the Trustee (or, if there be no
trustee hereunder, the City) shall constitute a sufficient
publication of such notice.
Ordinance:
"Ordinance" shall mean this Ordinance of the City as
modified, altered, amended or supplemented by any and all
ordinances and resolutions supplemental hereto or amendatory
hereof adopted by the City Council and effective prior to the
initial issuance of the Bonds and all Supplemental Ordinances and
related resolutions adopted thereafter by the City Council
pursuant hereto.
Original Sale Agreements:
"Original Sale Agreements" shall mean the Series 1973
Installment Sale Agreement and the Series 1977 Installment Sale
Agreement.
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 this Ordinance 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 hereof; and
(c) those in lieu of or in exchange or substitution for
which other Bonds shall have been authenticated and
delivered pursuant to this Ordinance, unless proof
satisfactory to the Trustee and the Company is presented
that such Bonds are held by a bona fide holder in due
course.
Owner:
"Owner" shall mean the person in whose name any Bond is
registered upon the registration books maintained pursuant to
Section 2.08 hereof. The Company may be an Owner.
Paying Agent; Co-Paying Agent; Principal Office thereof:
"Paying Agent" and "Co-Paying Agent" shall mean the paying
agent and any co-paying agent appointed in accordance with
Section 10.21 hereof. "Principal Office" of the Paying Agent or
any Co-Paying Agent shall mean the office thereof designated in
writing to the Trustee.
Plant:
"Plant" shall mean Units 1 and 2 and related common
facilities of the San Juan Generating Station, an electric power
generating plant located northwest of and within fifteen miles of
the corporate limits of the City in San Juan County, New Mexico
and not within the corporate limits of any municipality, and any
additions or improvements thereto or replacements thereof.
Plant Agreements:
"Plant Agreements" shall mean all contracts relating to
the ownership, construction and operation of the Plant, including
the Facilities, as from time to time amended or supplemented.
Prior Bonds:
"Prior Bonds" shall mean the 1973 Bonds and the 1977 Bonds,
collectively.
Purchase Price Payments:
"Purchase Price Payments" shall mean the payments required
to be made by the Company pursuant to Section 5.02 of the Sale
Agreement.
Rebate Fund:
"Rebate Fund" shall mean the fund created by Section 7.08
hereof.
Receipts and Revenues of the City from the Sale Agreement:
"Receipts and Revenues of the City from the Sale Agreement"
shall mean all moneys paid or payable to the Trustee for the
account of the City by the Company in respect of the Purchase
Price Payments and all receipts of the Trustee which, under the
provisions of this Ordinance, reduce the amount of such payments.
Record Date:
"Record Date" shall mean the close of business on the
fifteenth (15th) day of the calendar month immediately preceding
each regularly scheduled interest payment date.
Registrar; Principal Office thereof:
"Registrar" shall mean the registrar appointed in accordance
with Section 10.23 hereof. "Principal Office" of the Registrar
shall mean the office thereof designated in writing to the
Trustee.
Sale Agreement:
"Sale Agreement" shall mean the Amended and Restated
Installment Sale Agreement, dated as of April 1, 1997, amending
and restating the Original Sale Agreements, between the City, as
Vendor and the Company, as Vendee, and any and all modifications,
alterations, amendments and supplements thereto.
Series 1973 Installment Sale Agreement:
"Series 1973 Installment Sale Agreement" shall mean the
Installment Sale Agreement, dated as of December 1, 1973, between
the City, as Vendor, and Public Service Company of New Mexico
(which has now been discharged therefrom) and the Company, as
Vendees, as amended and supplemented pursuant to the terms
thereof prior to the date hereof.
Series 1977 Installment Sale Agreement:
"Series 1977 Installment Sale Agreement" shall mean the
Installment Sale Agreement, dated as of November 1, 1977, between
the City, as Vendor, and the Company, as Vendee, as amended and
supplemented pursuant to the terms thereof prior to the date
hereof.
State:
"State" shall mean the State of New Mexico.
Supplemental Ordinance:
"Supplemental Ordinance" shall mean any ordinance or
resolution adopted by the City Council and effective subsequent
to the initial issuance of the Bonds modifying, altering,
amending, supplementing or confirming this Ordinance for any
purpose, in accordance with the terms hereof, as such
Supplemental Ordinance may be modified, altered, amended or
supplemented by any and all ordinances and resolutions of the
City Council adopted pursuant hereto.
Supplemental Sale Agreement:
"Supplemental Sale Agreement" shall mean any agreement
between the City and the Company modifying, altering, amending or
supplementing the Sale Agreement, in accordance with the terms
thereof and hereof.
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 City and the Company, relating
to the requirements of the Code and the 1954 Code, and any and
all modifications, alterations, amendments and supplements
thereto.
Trust Estate:
"Trust Estate" shall mean at any particular time all right,
title and interest of the City in and to the Sale Agreement
(except its rights under Sections 5.04, 5.05, 6.03 and 8.05
thereof and any rights of the City to receive notices,
certificates, requests, requisitions and other communications
thereunder), including without limitation, the Receipts and
Revenues of the City from the Sale Agreement, the Bond Fund and
all moneys and Investment Securities from time to time on deposit
therein (excluding, however, any moneys or Investment Securities
held in the Rebate Fund), any and all other moneys and
obligations (other than Bonds) which at such time are deposited
or are required to be deposited with, or are held or are required
to be held by or on behalf of, the Trustee, the Paying Agent or
any Co-Paying Agent in trust under any of the provisions of this
Ordinance and all other rights, titles and interests which at
such time are subject to the lien of this Ordinance; provided,
however, that in no event shall there be included in the Trust
Estate (a) moneys or obligations deposited with or held by the
Trustee in the Rebate Fund pursuant to Section 7.08 hereof or (b)
moneys or obligations deposited with or paid to the Trustee for
the redemption or payment of Bonds which are deemed to have been
paid in accordance with Article VIII hereof or moneys held
pursuant to Section 4.06 hereof.
Trustee; Principal Office thereof:
"Trustee" shall mean the bank or trust company appointed as
trustee in a resolution of the City Council of the City adopted
prior to the first issuance of the Bonds, its successors in trust
and their assigns. "Principal Office" of the Trustee shall mean
the principal corporate trust office of the Trustee, which office
at the date of acceptance by the Trustee of the duties and
obligations imposed on the Trustee by this Ordinance is located
at the address specified in such resolution.
Section 1.02. Findings, Declarations, Determinations,
Approvals and Authorizations. It is hereby found and determined
that:
(1) The City is authorized and empowered under the Act
to issue and sell the Bonds authorized under this Ordinance and
to enter into the Sale Agreement and the same will further the
intent of the Act.
(2) The Facilities are located within 15 miles of the
corporate limits of the City and not within the corporate limits
of any municipality.
(3) The amount necessary in each year to pay the
principal of and premium, if any, and interest (excluding accrued
interest and purchase premium, if any, to be paid by the initial
purchasers of the Bonds) on the Bonds is equal to the portion of
the purchase price of the Facilities refinanced with the proceeds
of the Bonds in each such year required to be paid by the Company
to the Trustee by Section 5.02 of the Sale Agreement. The City
Council shall determine and set forth in a resolution adopted
prior to the first issuance of Bonds the amount necessary to pay
in each year the principal of and interest on the Bonds.
(4) It is not advisable or necessary to establish any
reserve fund in connection with the retirement of the Bonds or
the maintenance of the Facilities and no reserve fund has been
established for the Bonds. The Sale Agreement provides that, as
purchaser of an undivided interest in the Facilities from the
City, the Company shall exercise all of its rights, powers,
elections and options under the Plant Agreements to cause the
Facilities to be maintained in good repair and to keep or cause
to be kept the Facilities properly insured, and under the Sale
Agreement the Company is obligated to make payments that shall be
at least sufficient to pay before the same shall become due, as
set forth in subsection (3) above, the principal of and premium,
if any, and interest on the Bonds.
(5) The City shall not operate the Facilities as a
business or in any manner except as seller of an undivided
interest therein under the Sale Agreement.
(6) The Bonds shall not be the general obligations of
the City within the meaning of Article 9, Sections 12 and 13 of
the Constitution of New Mexico, shall be payable by the City
solely from the Receipts and Revenues of the City from the Sale
Agreement, and the Bonds shall never constitute an indebtedness
of the City within the meaning of any State constitutional
provision or statutory limitation, and shall never constitute or
give rise to any pecuniary liability of the City or a charge
against its general credit or taxing powers, and such fact shall
be plainly stated on the face of each such Bond.
(7) In connection with the authorization, issuance and
sale of the Bonds pursuant to this Ordinance, it is advantageous
that the sale thereof be private rather than public within the
meaning of the Act.
(8) The Mayor and the City Clerk are, and each of them
is, authorized and directed to cause this Ordinance to be
published one time by title and a general summary of the subject
matter contained herein in the manner provided by Section 3-17-5,
New Mexico Statutes Annotated 1978. This Ordinance shall be
effective five days after it has been so published.
(9) The authority previously granted by resolution on
February 25, 1997 to the Mayor and the City Clerk to cause this
Ordinance in proposed form to be published by title and subject
matter in the manner provided by Section 3-17-3, New Mexico
Statutes Annotated 1978, is hereby confirmed and such publication
is hereby adopted, ratified and confirmed.
(10) The Trustee, Paying Agent and Registrar shall be
designated by a resolution of the City Council adopted prior to
the first issuance of Bonds under this Ordinance.
(11) The Mayor, the City Clerk and the City Treasurer or the
Deputy City Treasurer are authorized to take all action necessary
or appropriate to effectuate the provisions of this Ordinance,
including without limiting the generality of the foregoing,
preparation of the Bonds, the execution, delivery, and, if
required or desirable, the filing and recording of such
documents, instruments, financing statements and certificates as
are required by this Ordinance and as may reasonably be required
by the purchasers of the Bonds, including, without limiting the
generality of the foregoing, certificates relating to the signing
of the Bonds, the tenure and identity of the municipal officials,
the delivery of the Bonds and payment therefor, and, if in
accordance with the facts, the absence of litigation, pending or
threatened, affecting the validity of the Bonds, and the absence
and existence of factors affecting the exemption of interest on
the Bonds from federal income taxation, and, upon or after the
effective date of this Ordinance, to execute and deliver the
Bonds in accordance with this Ordinance and to do and cause to be
done any and all acts and things necessary or proper for carrying
out the transactions contemplated by this Ordinance, and all
actions taken pursuant to such authorization are hereby ratified,
approved and confirmed.
ARTICLE II
THE BONDS
Section 2.01. Creation of Bonds. There is hereby
authorized and created under this Ordinance, for the purpose of
providing moneys to refund, pay and redeem the Prior Bonds, an
issue of Bonds, entitled to the benefit, protection and security
of this Ordinance, in the aggregate principal amount of Eighty
Million Four Hundred Ten Thousand Dollars ($80,410,000). Each of
the Bonds shall be designated by the title "City of Farmington,
New Mexico Pollution Control Revenue Bond, 1997 Series A (Tucson
Electric Power Company San Juan Project)". The Bonds shall
mature in such amounts on such date or dates not exceeding thirty
years from the date of the Bonds, and shall bear such rate or
rates of interest from their date, payable semi-annually on
October 1 and April 1 of each year, commencing on October 1, 1997
until payment of the principal thereof shall have been made or
duly provided for in accordance with the provisions of this
Ordinance, all as shall be set forth in a resolution of the City
Council adopted prior to the initial issuance of the Bonds,
provided that such interest rate or rates shall not exceed the
maximum interest rate of 10% per annum. Unless otherwise
provided in such resolution of the City Council adopted prior to
the issuance of the Bonds, interest on the Bonds shall be
calculated on the basis of a 360-day year consisting of twelve
30-day months.
Section 2.02. Form of Bonds. Bonds shall be authenticated
and delivered hereunder solely as fully registered bonds without
coupons in the denomination of $5,000 or integral multiples
thereof. Bonds shall be numbered as determined by the Trustee.
Bonds authenticated prior to the first interest payment date
shall be dated April 1, 1997 or such other date as may be set
forth in a resolution of the City Council adopted prior to the
initial issuance of the Bonds. Bonds authenticated on or
subsequent to the first interest payment date thereon shall be
dated the interest payment date next preceding the date of
authentication thereof, unless such date of authentication shall
be an interest payment date to which interest on the Bonds has
been paid in full or duly provided for, in which case they shall
be dated such date of authentication; provided, however, that if,
as shown by the records of the Trustee, interest on the Bonds
shall be in default, Bonds issued in exchange for Bonds
surrendered for transfer or exchange shall be dated the date to
which interest has been paid in full on the Bonds surrendered.
Principal of and premium, if any, on Bonds shall be payable
to the Owners of such Bonds upon presentation and surrender of
such Bonds at the Principal Office of the Paying Agent or any
Co-Paying Agent. Interest on the Bonds shall be paid by check
drawn upon the Paying Agent and mailed to the Owners of such
Bonds as of the close of business on the Record Date with respect
to each interest payment date at the registered addresses of such
Owners as they shall appear as of the close of business on such
Record Date on the registration books maintained pursuant to
Section 2.08 hereof notwithstanding the cancellation of any such
Bond upon any exchange or registration of transfer subsequent to
such Record Date, except that if and to the extent that there
should be a default on the payment of interest on any Bond, such
defaulted interest shall be paid to the Owners in whose name such
Bond (or any Bond or Bonds issued upon any exchange or
registration of transfer thereof) is registered as of the close
of business on a date selected by the Trustee in its discretion,
but not more than 15 days or less than 10 days prior to the date
of payment of such defaulted interest; notwithstanding the
foregoing, upon request to the Paying Agent by an Owner of not
less than $1,000,000 in aggregate principal amount of Bonds,
interest on such Bonds and, after presentation and surrender of
such Bonds, the principal thereof shall be paid to such Owner by
wire transfer to the account maintained within the continental
United States specified by such Owner or, if such Owner maintains
an account with the entity acting as Paying Agent, by deposit
into such account. Payment as aforesaid shall be made in such
coin or currency of the United States of America as, at the
respective times of payment, shall be legal tender for the
payment of public and private debts.
The Bonds and the form for registration of transfer and the
form of certificate of authentication to be printed on the Bonds
are to be in substantially the forms thereof set forth in
Exhibits A, B and C hereto, respectively, with necessary or
appropriate variations, omissions and insertions as permitted or
required by this Ordinance.
Section 2.03. Execution of Bonds. The Bonds shall be
executed on behalf of the City by its Mayor and Treasurer or
Deputy City Treasurer and shall have affixed, impressed or
reproduced thereon the corporate seal of the City which shall be
attested by the City Clerk. Each of the foregoing officers,
after filing with the Secretary of State of the State of New
Mexico the manual signature of such officer certified under oath,
may execute or cause to be executed or attest or cause to be
attested with a facsimile signature in lieu of his manual
signature the Bonds.
In case any officer of the City whose signature or a
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the authentication by the Trustee
and delivery of such Bonds, such signature or such facsimile
shall nevertheless be valid and sufficient for all purposes, the
same as if such officer had remained in office until delivery;
and any Bond may be signed on behalf of the City by such persons
as, at the time of execution of such Bond, shall be the proper
officers of the City, even though at the date of such Bond or of
the execution and delivery of this Ordinance any such person was
not such officer.
Section 2.04. Authentication of Bonds. Only such Bonds as
shall have endorsed thereon a certificate of authentication
substantially in the form set forth in Exhibit C hereto duly
executed by the Trustee shall be entitled to any right or benefit
under this Ordinance. No Bond shall be valid or obligatory for
any purpose unless and until such certificate of authentication
shall have been duly executed by the Trustee, and such executed
certificate of authentication of the Trustee upon any such Bonds
shall be conclusive evidence that such Bond has been
authenticated and delivered under this Ordinance. The Trustee's
certificate of authentication on any Bond shall be deemed to have
been executed by it if signed with an authorized signature of the
Trustee, but it shall not be necessary that the same person sign
the certificate of authentication on all of the Bonds issued
hereunder. This Section 2.04 is subject to the provisions of
Section 10.17 hereof.
Section 2.05. Bonds Not General Obligations. The Bonds and
the premium, if any, and the interest thereon shall not be
general obligations or indebtedness of the City within the
meaning of Article 9, Sections 12 and 13 of the Constitution of
the State of New Mexico, but shall be limited obligations of the
City payable solely from the Receipts and Revenues of the City
from the Sale Agreement and the other moneys pledged therefor
under this Ordinance. The Bonds and the premium, if any, and
interest thereon shall never constitute an indebtedness of the
City within the meaning of any state constitutional provision or
statutory limitation, and shall never constitute nor give rise to
a pecuniary liability of the City or a charge against its general
credit or taxing powers, and such fact shall be plainly stated on
the face of each Bond.
Section 2.06. Prerequisites to Authentication of Bonds.
The City shall execute and deliver to the Trustee and the Trustee
shall authenticate the Bonds and deliver said Bonds to the
initial purchasers thereof as may be directed hereinafter in this
Section 2.06.
Prior to the delivery on original issuance by the Trustee of
any authenticated Bonds there shall be or have been delivered to
the Trustee:
(a) a duly certified copy of the Ordinance;
(b) an original duly executed counterpart or a duly
certified copy of the Sale Agreement;
(c) a request and authorization to the Trustee on
behalf of the City, signed by its Mayor, to authenticate and
deliver the Bonds in the aggregate principal amount
determined by this Ordinance to the purchaser or purchasers
therein identified upon payment to the Trustee, but for the
account of the City, of a sum specified in such request and
authorization plus any accrued interest on such Bonds to the
date of delivery, in the aggregate principal amount
determined by this Ordinance; and
(d) a written statement on behalf of the Company,
executed by the President, any Vice President or the
Treasurer, (i) approving the issuance and delivery of the
Bonds and (ii) consenting to each and every provision of
this Ordinance.
Section 2.07. Lost or Destroyed Bonds or Bonds Canceled in
Error. If any Bond, whether in temporary or definitive form, is
lost (whether by reason of theft or otherwise), destroyed
(whether by mutilation, damage, in whole or in part, or
otherwise) or canceled in error, the City may execute and the
Trustee may authenticate a new Bond of like date and denomination
and bearing a number not contemporaneously outstanding; provided
that (a) in the case of any mutilated Bond, such mutilated Bond
shall first be surrendered to the Trustee and (b) in the case of
any lost Bond or Bond destroyed in whole, there shall be first
furnished to the City, the Trustee and the Company evidence of
such loss or destruction. In every case, the applicant for a
substitute Bond shall furnish the City, the Trustee and the
Company such security or indemnity as may be required by any of
them. In the event any lost or destroyed Bond or a Bond canceled
in error shall have matured or is about to mature, or has been
called for redemption, instead of issuing a substitute Bond the
Trustee may, in its discretion, pay the same without surrender
thereof if there shall be first furnished to the City, the
Trustee and the Company evidence of such loss, destruction or
cancellation, together with indemnity, satisfactory to them.
Upon the issuance of any substitute Bond, the City and the
Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation
thereto. The Trustee may charge the Owner of any such Bond with
the Trustee's reasonable fees and expenses in connection with any
transaction described in this Section 2.07.
Every substitute Bond issued pursuant to the provisions of
this Section 2.07 by virtue of the fact that any Bond is lost,
destroyed or canceled in error shall constitute an additional
contractual obligation of the City, whether or not the Bond so
lost, destroyed or canceled shall be at any time enforceable, and
shall be entitled to all the benefits of this Ordinance equally
and proportionately with any and all other Bonds duly issued
hereunder. All Bonds shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or
payment of lost, destroyed or improperly canceled Bonds,
notwithstanding any law or statute now existing or hereafter
enacted.
Section 2.08. Transfer, Registration and Exchange of Bonds.
The Registrar shall maintain and keep, at its Principal Office,
books for the registration and registration of transfer of Bonds,
which, at all reasonable times, shall be open for inspection by
the City, the Trustee and the Company; and, upon presentation for
such purpose of any Bond entitled to registration or registration
of transfer at the Principal Office of the Registrar, the
Registrar shall register or register the transfer in such books,
under such reasonable regulations as the Registrar may prescribe.
The Registrar shall make all necessary provisions to permit the
exchange or registration of transfer of Bonds at its Principal
Office.
The transfer of any Bond shall be registered upon the
registration books of the Registrar at the written request of the
Owner thereof or his attorney duly authorized in writing, upon
surrender thereof at the Principal Office of the Registrar,
together with a written instrument of transfer satisfactory to
the Registrar duly executed by the Owner or his duly authorized
attorney. Upon the registration of transfer of any such Bond or
Bonds, the City shall issue in the name of the transferee, in
authorized denominations, a new Bond or Bonds in the same
aggregate principal amount as the surrendered Bond or Bonds.
The City, the Trustee, the Paying Agent, any Co-Paying Agent
and the Registrar may deem and treat the Owner of any Bond as the
absolute owner of such Bond, whether such Bond shall be overdue
or not, for the purpose of receiving payment of, or on account
of, the principal of and premium, if any, and, except as provided
in Section 2.02 hereof, interest on such Bond and for all other
purposes, and neither the City, the Trustee, the Paying Agent,
any Co-Paying Agent nor the Registrar shall be affected by any
notice to the contrary. All such payments so made to any such
Owner or upon his order shall be valid and effective to satisfy
and discharge the liability upon such Bond to the extent of the
sum or sums so paid.
Bonds, upon surrender thereof at the Principal Office of the
Registrar may, at the option of the Owner thereof, be exchanged
for an equal aggregate principal amount of Bonds of any
authorized denomination.
In all cases in which the privilege of exchanging Bonds or
registering the transfer of Bonds is exercised, the City shall
execute and the Trustee shall authenticate and deliver Bonds in
accordance with the provisions of this Ordinance. For every such
exchange or registration of transfer of Bonds, whether temporary
or definitive, the City, the Registrar, or the Trustee may make a
charge sufficient to reimburse it for any tax or other
governmental charge required to be paid with respect to such
exchange or registration of transfer, which sum or sums shall be
paid by the person requesting such exchange or registration of
transfer as a condition precedent to the exercise of the
privilege of making such exchange or registration of transfer.
The Registrar shall not be obligated (a) to make any such
exchange or registration of transfer of Bonds during the fifteen
(15) days next preceding the date on which notice of any proposed
redemption of Bonds is given, (b) to make any exchange or
registration of transfer of any Bonds called for redemption.
The Bonds are to be initially registered in the name of Cede
& Co., as nominee for the Depositary. Such Bonds shall not be
transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:
(a) such Bonds may be transferred in whole, and
appropriate registration of transfer effected, if such
transfer is by such nominee to the Depositary, or by the
Depositary to another nominee thereof, or by any nominee of
the Depositary to any other nominee thereof, or by the
Depositary or any nominee thereof to any successor
securities depositary or any nominee thereof; and
(b) such Bond may be exchanged for definitive Bonds
registered in the respective names of the beneficial holders
thereof, and thereafter shall be transferable without
restriction, if:
(i) the Depositary shall have notified the City, the
Company and the Trustee that it is unwilling or unable to
continue to act as securities depositary with respect to
such Bonds and the Trustee shall not have been notified by
the City at the direction of the Company within a reasonable
time after the identity of a successor securities depositary
with respect to such Bonds;
(ii) the Company shall have delivered to the Trustee a
written instrument to the effect that such Bonds shall be so
exchangeable on and after a date specified therein; or
(iii) (1) an Event of Default shall have occurred and
be continuing, (2) the Trustee shall have given notice of
such Event of Default pursuant to Section 10.19 hereof and
(3) there shall have been delivered to the City, the Company
and the Trustee an opinion of counsel to the effect that the
interests of the beneficial owners of such Bonds in respect
thereof will be materially impaired unless such owners
become owners of definitive Bonds.
The Bonds delivered to the Depositary may contain a legend
reflecting the foregoing restrictions on registration of transfer
and exchange.
Section 2.09. Other Obligations. The City expressly
reserves the right to issue, to the extent permitted by law, but
shall not be obligated to issue, obligations under another
ordinance or ordinances to provide additional funds to pay the
cost of construction of the Facilities or to refund all or any
principal amount of the Bonds, or any combination thereof.
Section 2.10. Temporary Bonds. Pending the preparation of
definitive Bonds, the City may execute and the Trustee shall
authenticate and deliver temporary Bonds. Temporary Bonds shall
be issuable as registered Bonds without coupons, of any
authorized denomination, and substantially in the form of the
definitive Bonds but with such omissions, insertions and
variations as may be appropriate for temporary Bonds, all as may
be determined by the City. Temporary Bonds may contain such
reference to any provisions of this Ordinance as may be
appropriate. Every temporary Bond shall be executed by the City
and be authenticated by the Trustee upon the same conditions and
in substantially the same manner, and with like effect, as the
definitive Bonds. As promptly as practicable the City shall
execute and shall furnish definitive Bonds and thereupon
temporary Bonds may be surrendered in exchange therefor without
charge at the Principal Office of the Trustee, and the Trustee
shall authenticate and deliver in exchange for such temporary
Bonds a like aggregate principal amount of definitive Bonds of
authorized denominations. Until so exchanged the temporary Bonds
shall be entitled to the same benefits under this Ordinance as
definitive Bonds.
Section 2.11. Cancellation of Bonds. All Bonds which shall
have been surrendered to the Paying Agent or any Co-Paying Agent
for payment or redemption, and all Bonds which shall have been
surrendered to the Registrar for exchange or registration of
transfer, shall be delivered to the Trustee for cancellation.
All Bonds delivered to or acquired by the Trustee for
cancellation shall be canceled and destroyed by the Trustee. The
Trustee shall furnish to the City, the Paying Agent, the
Registrar and the Company counterparts of certificates evidencing
such cancellation and destruction and specifying such Bonds by
number.
Section 2.12. Payment of Principal and Interest. For the
payment of interest on the Bonds, the City shall cause to be
deposited in the Bond Fund, on each interest payment date, solely
out of the Receipts and Revenues of the City from the Sale
Agreement and other moneys pledged therefor, an amount sufficient
to pay the interest to become due on such interest payment date.
The obligation of the City to cause any such deposit to be made
hereunder shall be reduced by the amount of moneys in the Bond
Fund available on such interest payment date for the payment of
interest on the Bonds.
For the payment of the principal of the Bonds upon maturity,
the City shall cause to be deposited in the Bond Fund, on the
stated or accelerated date of maturity, solely out of the
Receipts and Revenues of the City from the Sale Agreement and
other moneys pledged therefor, an amount sufficient to pay the
principal of the Bonds. The obligation of the City to cause any
such deposit to be made hereunder shall be reduced by the amount
of moneys in the Bond Fund available on the maturity date for the
payment of the principal of the Bonds.
Section 2.13. Bonds Equally Secured. The Trust Estate
shall be for the equal and proportionate benefit, security and
protection of all Owners of the Bonds issued under and secured by
this Ordinance without privilege, priority or distinction as to
the lien or otherwise of any of the Bonds over any other of the
Bonds, all upon the terms stated herein.
Section 2.14. Applicability of Book-Entry Provisions.
Anything in this Ordinance to the contrary notwithstanding, (a)
the provisions of the Blanket Issuer Letter of Representations,
dated December 5, 1996, between the City and The Depository Trust
Company relating to the manner of and procedures for payment and
redemption of Bonds and related matters shall apply so long as
such Depositary shall be the Owner of all Outstanding Bonds and
(b) the City, the Trustee or the Paying Agent, as applicable, may
enter into a similar agreement, on terms satisfactory to the
Company, with any subsequent Depositary and the provisions
thereof shall apply so long as such Depositary shall be the Owner
of all Outstanding Bonds.
ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption Provisions. (a) The Bonds shall
be subject to redemption by the City, at the direction of the
Company, on any date on or after October 1, 2007 in whole at any
time or in part from time to time, at the applicable redemption
price (expressed as a percentage of principal amount) set forth
below, plus accrued interest to the redemption date:
Redemption Period Redemption
Price
---------------- ---------------
-
October 1, 2007 through September 30, 2008 102%
October 1, 2008 through September 30, 2009 101%
October 1, 2009 and thereafter 100%
(b) The Bonds shall be subject to redemption by the City,
at the direction of the Company, in whole at any time at the
principal amount thereof plus accrued interest to the redemption
date, if:
(i) the Company shall have determined that the
continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason;
(ii) the Company shall have determined that the
continued operation of the Facilities is impracticable,
uneconomical or undesirable due to (A) the imposition of
taxes, other than ad valorem taxes currently levied upon
privately owned property used for the same general purpose
as the Facilities, or other liabilities or burdens with
respect to the Facilities or operation thereof, (B) changes
in technology, in environmental standards or legal
requirements or in the economic availability of materials,
supplies, equipment or labor or (C) destruction of or damage
to all or part of the Facilities;
(iii) all or substantially all of the Facilities or
the Plant shall have been condemned or taken by eminent
domain; or
(iv) the operation of the Facilities or the Plant
shall have been enjoined or shall have otherwise been
prohibited by, or shall conflict with, any order, decree,
rule or regulation of any court or of any federal, state or
local regulatory body, administrative agency or other
governmental body.
(c) The Bonds shall be subject to mandatory redemption by
the City, at the principal amount thereof plus accrued interest
to the redemption date, on the 180th day (or such earlier date as
may be designated by the Company) after a final determination by
a court of competent jurisdiction or an administrative agency, to
the effect that, as a result of a failure by the Company to
perform or observe any covenant, agreement or representation
contained in the Sale Agreement, the interest payable on the
Bonds is included for federal income tax purposes in the gross
income of the owners thereof, other than any owner of a Bond who
is a "substantial user" of the Facilities or a "related person"
within the meaning of Section 103(b)(13) of the 1954 Code. No
determination by any court or administrative agency shall be
considered final for the purposes of this Section 3.01 (b) unless
the Company shall have been given timely notice of the proceeding
which resulted in such determination and an opportunity to
participate in such proceeding, either directly or through an
owner of a Bond, and until the conclusion of any appellate review
sought by any party to such proceeding or the expiration of the
time for seeking such review. The Bonds shall be redeemed either
in whole or in part in such principal amount that the interest
payable on the Bonds remaining outstanding after such redemption
would not be included in the gross income of any owner thereof,
other than an owner of a Bond who is a "substantial user" of the
Facilities or a "related person" within the meaning of
Section 103(b)(13) of the 1954 Code.
Section 3.02. Selection of Bonds to be Redeemed. If less
than all the Bonds shall be called for redemption under any
provision of this Ordinance permitting such partial redemption,
the particular Bonds or portions of Bonds to be redeemed shall be
selected by the Trustee, in such manner as the Trustee in its
discretion may deem proper, in the aggregate principal amount
designated to the Trustee by the Company or otherwise as required
by this Ordinance; provided, however, that if, as indicated in a
certificate of an Authorized Company Representative delivered to
the Trustee, the Company shall have offered to purchase all Bonds
then Outstanding and less than all such Bonds have been tendered
to the Company for such purchase, the Trustee, at the direction
of an Authorized Company Representative, shall select for
redemption all such Bonds which shall not have been so tendered;
and provided, further, that the portion of any Bond to be
redeemed shall be in the principal amount of $5,000 or some
integral multiple thereof and that, in selecting Bonds for
redemption, the Trustee shall treat each Bond as representing
that number of Bonds which is obtained by dividing the principal
amount of such Bond by $5,000. If it is determined that one or
more, but not all, of the $5,000 units of principal amount
represented by any such Bond is to be called for redemption,
then, upon notice of intention to redeem such $5,000 unit or
units, the Owner of such Bond shall forthwith surrender such Bond
to the Paying Agent or any Co-Paying Agent for (y) payment to
such Owner of the redemption price (including the redemption
premium, if any, and accrued interest to the date fixed for
redemption) of the $5,000 unit or units of principal amount
called for redemption and (z) delivery to such Owner of a new
Bond or Bonds in the aggregate principal amount of the unredeemed
balance of the principal amount of any such Bond. Bonds
representing the unredeemed balance of the principal amount of
any such Bond shall be delivered to the Owner thereof, without
charge therefor. If the Owner of any such Bond of a denomination
greater than $5,000 shall fail to present such Bond to the Paying
Agent or any Co-Paying Agent for payment and exchange as
aforesaid, such Bond shall, nevertheless, become due and payable
on the date fixed for redemption to the extent of the $5,000 unit
or units of principal amount called for redemption (and to that
extent only).
Section 3.03. Procedure for Redemption. (a) In the event
any of the Bonds are called for redemption, the Trustee shall
give notice, in the name of the City, of the redemption of such
Bonds, which notice shall (i) specify the Bonds to be redeemed,
the redemption date, the redemption price, and the place or
places where amounts due upon such redemption will be payable
(which shall be the Principal Office of the Paying Agent or any
Co-Paying Agent) and, if less than all of the Bonds are to be
redeemed, the numbers of the Bonds to be redeemed, and the
portion of the principal amount of any Bond to be redeemed in
part, (ii) state any condition to such redemption and (iii) state
that on the redemption date, and upon the satisfaction of any
such condition, the Bonds or portions thereof to be redeemed
shall cease to bear interest. Such notice may set forth any
additional information relating to such redemption. Such notice
shall be given by Mail at least thirty (30) days prior to the
date fixed for redemption to the Owners of the Bonds to be
redeemed; provided, however, that failure duly to give such
Notice by Mail, or any defect therein, shall not affect the
validity of any proceedings for the redemption of Bonds as to
which there shall have been no such failure or defect. If a
notice of redemption shall be unconditional, or if the conditions
of a conditional notice or redemption shall have been satisfied,
then upon presentation and surrender of Bonds so called for
redemption at the place or places of payment, such Bonds shall be
redeemed. The Trustee shall promptly deliver to the Company a
copy of each such notice of redemption.
(b) With respect to any notice of redemption of Bonds in
accordance with subsection (a) or (b) of Section 3.01 hereof,
unless, upon the giving of such notice, such Bonds shall be
deemed to have been paid within the meaning of Article VIII
hereof, such notice shall state that such redemption shall be
conditional upon the receipt, by the Trustee on or prior to the
opening of business on the date fixed for such redemption, of
moneys sufficient to pay the principal of and premium, if any,
and interest on such Bonds to be redeemed, and that if such
moneys shall not have been so received said notice shall be of no
force and effect and the City shall not be required to redeem
such Bonds. In the event that such notice of redemption contains
such a condition and such moneys are not so received, the
redemption shall not be made and the Trustee shall within a
reasonable time thereafter give notice, in the manner in which
the notice of redemption was given, that such moneys were not so
received.
(c) Any Bonds and portions of Bonds which have been duly
selected for redemption shall cease to bear interest on the
specified redemption date provided that moneys sufficient to pay
the principal of, premium, if any, and interest on such Bonds
shall be on deposit with the Trustee on the date fixed for
redemption so that such Bonds will be deemed to be paid in
accordance with Article VIII hereof.
Section 3.04. No Partial Redemption After Default.
Anything in this Ordinance to the contrary notwithstanding, if
there shall have occurred and be continuing an Event of Default
defined in clause (a) or (b) of the first paragraph of Section
9.01 hereof, there shall be no redemption of less than all of the
Bonds at the time Outstanding other than a partial redemption in
connection with an offer by the Company to purchase all Bonds
Outstanding as contemplated in the first proviso to the first
sentence of Section 3.02 hereof.
Section 3.05. Payment of Redemption Price. For the
redemption of any of the Bonds, the City shall cause to be
deposited in the Bond Fund, on the redemption date, solely out of
the Receipts and Revenues of the City from the Sale Agreement, an
amount sufficient to pay the principal of and premium, if any,
and interest to become due on such redemption date. The
obligation of the City to cause any such deposit to be made
hereunder shall be reduced by the amount of moneys in the Bond
Fund available on such redemption date for payment of the
principal of and premium, if any, and accrued interest on the
Bonds to be redeemed.
ARTICLE IV
THE BOND FUND
Section 4.01. Creation of Bond Fund. There is hereby
created and established with the Trustee a trust fund in the name
of the City to be designated "City of Farmington, New Mexico
Pollution Control Revenue Bonds, 1997 Series A (Tucson Electric
Power Company San Juan Project) Bond Fund". The Trustee shall
establish and maintain within the Bond Fund such segregated
accounts and subaccounts as may be requested by an Authorized
Company Representative. The Bond Fund, and all moneys and
certificated securities therein, shall be kept in the possession
of the Trustee.
Section 4.02. Liens. The City shall not create any lien
upon the Bond Fund or upon the Receipts and Revenues of the City
from the Sale Agreement other than the lien hereby created.
Section 4.03. Deposits into Bond Fund. (a) There shall be
deposited into the Bond Fund:
(i) the accrued interest, if any, on the Bonds accrued
to the date of delivery thereof and paid by the initial
purchasers thereof;
(ii) all Purchase Price Payments; and
(iii) all other moneys received by the Trustee under
and pursuant to any provision of the Sale Agreement, other
than Sections 5.04, 5.05 and 8.05 thereof, or from any other
source when accompanied by directions by the Company that
such moneys are to be paid into the Bond Fund;
(b) All income or other gain from the investment of moneys
in the Bond Fund shall be deposited into the Bond Fund.
Section 4.04. Use of Moneys in Bond Fund. Moneys, if any,
paid into the Bond Fund pursuant to clause (i) of Section 4.03(a)
hereof shall be applied to the payment of interest on the Bonds.
Except as otherwise provided in Sections 4.06, 9.01 and 10.04
hereof, all other moneys in the Bond Fund constituting part of
the Trust Estate shall be used solely for the payment of the
principal of and premium, if any, and interest on the Bonds as
the same shall become due and payable at maturity, upon
redemption or otherwise.
Section 4.05. Custody of Bond Fund; Withdrawal of Moneys.
The Bond Fund shall be in the custody of the Trustee but in the
name of the City and the City hereby authorizes and directs the
Trustee to withdraw from the Bond Fund and furnish to the Paying
Agent funds constituting part of the Trust Estate sufficient to
pay the principal of and premium, if any, and interest on the
Bonds as the same shall become due and payable, and to withdraw
from the Bond Fund funds sufficient to pay any other amounts
payable therefrom as the same shall become due and payable.
Section 4.06. Bonds Not Presented for Payment. In the
event any Bonds shall not be presented for payment when the
principal thereof and premium, if any, thereon become due, either
at maturity or at the date fixed for redemption thereof or
otherwise, if moneys sufficient to pay such Bonds are held by the
Paying Agent or any Co-Paying Agent for the benefit of the Owners
thereof, the Paying Agent shall segregate and hold such moneys in
trust, without liability for interest thereon, for the benefit of
the Owners of such Bonds, who shall, except as provided in the
following paragraph, thereafter be restricted exclusively to such
fund or funds for the satisfaction of any claim of whatever
nature on their part under this Ordinance or relating to said
Bonds.
Any moneys which the Paying Agent shall segregate and hold
in trust for the payment of the principal of and premium, if any,
or interest on any Bond and remaining unclaimed for one year
after such principal, premium, if any, or interest has become due
and payable shall, upon the Company's written request to the
Paying Agent, be paid to the Company, with notice to the Trustee
of such action; provided, however, that before the Paying Agent
shall be required to make any such repayment, the Paying Agent
may, and at the request of the Trustee shall, at the expense of
the Company cause notice to be given once by Publication to the
effect that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days
from the date of such notice by Publication, any unclaimed
balance of such moneys then remaining will be paid to the
Company. After the payment of such unclaimed moneys to the
Company, the Owner of such Bond shall thereafter look only to the
Company for the payment thereof, and all liability of the City,
the Trustee and the Paying Agent with respect to such moneys
shall thereupon cease.
Section 4.07. Moneys Held in Trust. All moneys and
Investment Securities held by the Trustee in the Bond Fund, and
all moneys required to be deposited with or paid to the Trustee
for deposit into the Bond Fund, and all moneys withdrawn from the
Bond Fund and held by the Trustee, the Paying Agent, any
Co-Paying Agent, shall be held by the Trustee, the Paying Agent
or any Co-Paying Agent, as the case may be, in trust, and such
moneys and Investment Securities (other than moneys held pursuant
to Section 4.06 hereof and moneys or Investment Securities held
in the Rebate Fund established in furtherance of the obligations
of the Company under clause (b) of Section 6.04 of the Sale
Agreement), while so held or so required to be deposited or paid,
shall constitute part of the Trust Estate and be subject to the
lien and security interest created hereby in favor of the
Trustee, for the benefit of the Owners from time to time of the
Bonds. The Company shall have no right, title or interest in the
Bond Fund, except such rights as may arise after the right, title
and interest of the Trustee in and to the Trust Estate and all
covenants, agreements and other obligations of the City under
this Ordinance shall have ceased, terminated and become void and
shall have been satisfied and discharged in accordance with
Article VIII hereof.
ARTICLE V
DISPOSITION OF PROCEEDS
Section 5.01. Disposition of Proceeds. The proceeds from
the issuance and sale of the Bonds shall be applied as provided
in Section 4.03 of the Sale Agreement.
ARTICLE VI
INVESTMENTS
Section 6.01. Investments. The moneys in the Bond Fund
shall, at the direction of the Company, be invested and
reinvested in Investment Securities. Any Investment Securities
may be purchased subject to options or other rights in third
parties to acquire the same. Subject to the further provisions
of this Section 6.01, such investments shall be made by the
Trustee as directed and designated by the Company in a
certificate of, or telephonic advice promptly confirmed by a
certificate of, an Authorized Company Representative. As and
when any amounts thus invested may be needed for disbursements
from the Bond Fund, the Trustee shall request the Company to
designate such investments to be sold or otherwise converted into
cash to the credit of the Bond Fund as shall be sufficient to
meet such disbursement requirements and shall then follow any
directions in respect thereto of an Authorized Company
Representative. As long as no Event of Default (as defined in
Section 9.01 hereof) shall have occurred and be continuing, the
Company shall have the right to designate the investments to be
sold and to otherwise direct the Trustee in the sale or
conversion to cash of the investments made with the moneys in the
Bond Fund, provided that the Trustee shall be entitled to
conclusively assume the absence of any such Event of Default
unless it has notice thereof within the meaning of Section 10.05
hereof.
ARTICLE VII
GENERAL COVENANTS
Section 7.01. No General Obligations. Each and every
covenant herein made, including all covenants made in the various
sections of this Article VII, is predicated upon the condition
that any obligation for the payment of money incurred by the City
shall not be the general obligation or indebtedness of the City
within the meaning of Article 9, Sections 12 and 13 of the
Constitution of the State of New Mexico, and shall never
constitute an indebtedness of the City within the meaning of any
state constitutional provision or statutory limitation, and shall
never constitute nor give rise to a pecuniary liability of the
City or a charge against its general credit or taxing powers, but
shall be payable by the City solely from the Receipts and
Revenues of the City from the Sale Agreement, which are required
to be set apart and transferred to the Bond Fund, and which,
along with the balance of the Trust Estate, are hereby
specifically pledged to the payment thereof in the manner and to
the extent in this Ordinance specified, and nothing in the Bonds
or in this Ordinance shall be considered as pledging any other
funds or assets of the City.
The City shall promptly cause to be paid, solely from the
sources stated herein, the principal of and premium, if any, and
interest on every Bond issued under this Ordinance at the place,
on the dates and in the manner provided herein and in said Bonds
according to the true intent and meaning thereof.
Section 7.02. Performance of Covenants of the City;
Representations. The City shall faithfully perform at all times
any and all covenants, undertakings, stipulations and provisions
contained in this Ordinance, in any and every Bond executed,
authenticated and delivered hereunder, and in all proceedings
pertaining thereto. The City represents that it is duly
authorized under the Constitution and laws of the State of New
Mexico to issue the Bonds authorized hereby, to enter into the
Sale Agreement and to adopt this Ordinance, and to pledge and
assign to the Trustee the Trust Estate, and that the Bonds in the
hands of the Owners thereof are and will be valid and binding
limited obligations of the City.
Section 7.03. Maintenance of Rights and Powers; Compliance
with Laws. The City shall at all times maintain its corporate
existence or assure the assumption of its obligations under this
Ordinance by any public body succeeding to its powers under the
Act; and it shall at all times use its best efforts to comply
with all valid acts, rules, regulations, orders and directions of
any legislative, executive, administrative or judicial body known
to it to be applicable to the Sale Agreement and this Ordinance.
Section 7.04. Enforcement of Obligations of the Company;
Amendments. Upon receipt of written notification from the
Trustee, the City shall cooperate with the Trustee in enforcing
the obligation of the Company to pay or cause to be paid all the
payments and other costs and charges payable by the Company under
the Sale Agreement. The City shall not enter into any agreement
with the Company amending the Sale Agreement without the prior
written consent of the Trustee and compliance with Sections 12.06
and 12.07 of this Ordinance.
Section 7.05. Further Instruments. The City shall, upon
the reasonable request of the Trustee, from time to time execute
and deliver such further instruments and take such further action
as may be reasonable and as may be required to carry out the
purposes of this Ordinance; provided, however, that no such
instruments or actions shall pledge the credit or taxing power of
the State of New Mexico, the City or any other political
subdivision of said State.
Section 7.06. No Disposition of Trust Estate. Except as
permitted by this Ordinance, the City shall not sell, lease,
pledge, assign or otherwise dispose of or encumber its interest
in the Trust Estate and will promptly pay or cause to be
discharged or make adequate provision to discharge any lien or
charge on any part thereof not permitted hereby.
Section 7.07. Financing Statements. The City and the
Trustee shall cooperate with the Company in causing appropriate
financing statements, naming the Trustee as pledgee of the
Receipts and Revenues of the City from the Sale Agreement and of
the other moneys pledged under the Ordinance for the payment of
the principal of and premium, if any, and interest on the Bonds,
and as pledgee and assignee of the balance of the Trust Estate,
and the City shall cooperate with the Trustee and the Company in
causing appropriate continuation statements to be duly filed and
recorded in the appropriate state and county offices as required
by the provisions of the Uniform Commercial Code or other similar
law as adopted in the State of New Mexico and any other
applicable jurisdiction, as from time to time amended, in order
to perfect and maintain the security interests created by this
Ordinance.
Section 7.08. Tax Covenants; Rebate Fund. (a) The City
covenants for the benefit of all Owners from time to time of the
Bonds that the City, to the extent within its control, will not
take or omit to take any action which, would cause any of the
Bonds to be "arbitrage bonds" within the meaning of Section 148
of the Code or otherwise subject to federal income taxation by
reason of Sections 103 and 141 through 150 of the Code or Section
103 of the 1954 Code, as applicable, and any applicable
regulations promulgated thereunder. To that end the City
covenants to comply with all covenants set forth in the Tax
Agreement, which is hereby incorporated herein by reference as
though fully set forth herein.
(b) The Trustee shall establish and maintain a fund
separate from any other fund established and maintained hereunder
designated the "City of Farmington, New Mexico Pollution Control
Revenue Bonds, 1997 Series A (Tucson Electric Power Company San
Juan Project) Rebate Fund" (herein called the "Rebate Fund") in
accordance with the provisions of the Tax Agreement. Within the
Rebate Fund, the Trustee shall maintain such accounts as shall be
directed by the Company in order for the City and the Company to
comply with the provisions of the Tax Agreement. Subject to the
transfer provisions provided in paragraph (c) below, all money at
any time deposited in the Rebate Fund shall be held by the
Trustee in trust, to the extent required to satisfy the Rebate
Requirement (as defined in the Tax Agreement), for payment to the
United States of America, and neither the Company, the City or
the Owners shall have any rights in or claim to such moneys. All
amounts deposited into or on deposit in the Rebate Fund shall be
governed by this Section 7.08, by Section 6.04 of the Sale
Agreement and by the Tax Agreement. The Trustee shall
conclusively be deemed to have complied with such provisions if
it follows the directions of the Company, including supplying all
necessary information in the manner set forth in the Tax
Agreement, and shall not be required to take any actions
thereunder in the absence of written directions from the Company.
(c) Upon receipt of the Company's written instructions, the
Trustee shall remit part or all of the balances in the Rebate
Fund to the United States of America, as so directed. In
addition, if the Company so directs, the Trustee shall deposit
moneys into or transfer moneys out of the Rebate Fund from or
into such accounts or funds as directed by the Company's written
directions. Any funds remaining in the Rebate Fund after all of
the Bonds shall have been paid and any Rebate Requirement shall
have been satisfied, or provision therefor reasonably
satisfactory to the Trustee shall have been made, shall be
withdrawn and remitted to the Company.
(d) Notwithstanding any provision of this Ordinance, the
obligation to remit the Rebate Requirement to the United States
of America and to comply with all other requirements of this
Section 7.08, Section 6.04 of the Sale Agreement and the Tax
Agreement shall survive the payment of the Bonds and the
satisfaction and discharge of this Ordinance.
Section 7.09. Notices of Trustee. The Trustee shall give
notice to both the City and the Company whenever it is required
hereby to give notice to either and, additionally, shall furnish
to the City and the Company copies of any Notice by Mail or
Publication given by it pursuant to any provision hereof.
ARTICLE VIII
DEFEASANCE
Section 8.01. Defeasance. If the City shall pay or cause
to be paid to the Owner of any Bond secured hereby the principal
of and premium, if any, and interest due and payable, and
thereafter to become due and payable, upon such Bond or any
portion of such Bond in the principal amount of $5,000 or any
integral multiple thereof, such Bond or portion thereof shall
cease to be entitled to any lien, benefit or security under this
Ordinance. If the City shall pay or cause to be paid to the
Owners of all the Bonds secured hereby the principal of and
premium, if any, and interest due and payable, and thereafter to
become due and payable, thereon, and shall pay or cause to be
paid all other sums payable hereunder including, without
limitation, amounts payable pursuant to Section 10.04 hereof,
then, and in that case, the right, title and interest of the
Trustee in and to the Trust Estate shall thereupon cease,
terminate and become void. In such event, the Trustee shall
assign, transfer and turn over to the Company the Trust Estate,
including, without limitation, any surplus in the Bond Fund and
any balance remaining in any other fund created under this
Ordinance.
All or any portion of Outstanding Bonds or portions of Bonds
in principal amounts of $5,000 or any integral multiple thereof,
shall prior to the maturity or redemption date thereof be deemed
to have been paid within the meaning and with the effect
expressed in this Article VIII, and the entire indebtedness of
the City with respect thereof shall be satisfied and discharged,
when
(a) in the event said Bonds or portions thereof have
been selected for redemption in accordance with Section 3.02
hereof, the Trustee shall have given, or the Company shall
have given to the Trustee in form satisfactory to it
irrevocable instructions to give, on a date in accordance
with the provisions of Section 3.03 hereof, notice of
redemption of such Bonds or portions thereof,
(b) there shall have been deposited with the Trustee
either moneys in an amount which shall be sufficient, or
Government Obligations which shall not contain provisions
permitting the redemption thereof at the option of the
issuer, the principal of and the interest on which, when
due, and without regard to any reinvestment thereof, will
provide moneys which, together with the moneys, if any,
deposited with or held by the Trustee, shall be sufficient,
to pay when due the principal of and premium, if any, and
interest due and to become due on said Bonds or portions
thereof on and prior to the redemption date or maturity date
thereof, as the case may be; and
(c) in the event said Bonds or portions thereof do not
mature and are not to be redeemed within the next succeeding
sixty (60) days, the Company shall have given the Trustee in
form satisfactory to it irrevocable instructions to give, as
soon as practicable in the same manner as a notice of
redemption is given pursuant to Section 3.03 hereof, a
notice to the Owners of said Bonds or portions thereof that
the deposit required by clause (b) above has been made with
the Trustee and that said Bonds or portions thereof are
deemed to have been paid in accordance with this Article
VIII and stating the maturity or redemption date upon which
moneys are to be available for the payment of the principal
of and premium, if any, and interest on said Bonds or
portions thereof.
Neither the Government Obligations nor moneys deposited with
the Trustee pursuant to this Article VIII nor principal or
interest payments on any such Government Obligations shall be
withdrawn or used for any purpose other than, and such Government
Obligations, moneys and principal or interest payments shall be
held in trust for, the payment of the principal of and premium,
if any, and interest on said Bonds or portions thereof; provided,
that any cash received from such principal or interest payments
on such Government Obligations deposited with the Trustee, if not
then needed for such purposes, shall, to the extent practicable,
be invested in Government Obligations of the type described in
clause (b) of the preceding paragraph maturing at times and in
amounts sufficient to pay when due the principal of and premium,
if any, and interest to become due on said Bonds or portions
thereof on and prior to such redemption date or maturity date
thereof, as the case may be, and interest earned from such
reinvestments shall be paid over to the Company, as received by
the Trustee, free and clear of any trust, lien or pledge
hereunder. If payment of less than all the Bonds is to be
provided for in the manner and with the effect provided in this
Article VIII, the Trustee shall select such Bonds or portions of
Bonds in the manner specified by Section 3.02 hereof for
selection for redemption of less than all Bonds in the principal
amount designated to the Trustee by the Company. At or prior to
the time of the deposit of any Government Obligations with the
Trustee pursuant to this Section 8.01, the Company shall provide
the Trustee with a certificate of an accountant or an accounting
firm as to the sufficiency of such Government Obligations to pay
when due the principal of and premium, if any, and interest due
and to become due as set forth in clause (b) of the preceding
paragraph.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.01. Events of Default. Each of the following
events shall constitute and is referred to in this Ordinance as
an "Event of Default":
(a) a failure to pay the principal of or premium, if
any, on any of the Bonds when the same shall become due and
payable at maturity, upon redemption or otherwise;
(b) a failure to pay an installment of interest on any
of the Bonds after such interest shall have become due and
payable for a period of thirty (30) days;
(c) a failure by the City to observe and perform any
covenant, condition, agreement or provision (other than as
specified in clauses (a) and (b) of this Section 9.01)
contained in the Bonds or in this Ordinance on the part of
the City to be observed or performed, 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 City and the Company
by the Trustee, which may give such notice in its discretion
and which shall give such notice at the written request of
Owners of not less than 33% in principal amount of the Bonds
then Outstanding, unless the Trustee, or the Trustee and
Owners of a principal amount of Bonds not less than the
principal amount of Bonds the Owners of which requested that
such notice be given, as the case may be, shall agree in
writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the
Trustee and the Owners of such principal amount of Bonds, as
the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated
by the City, or the Company on behalf of the City, within
such period and is being diligently pursued.
Upon the occurrence and continuance of any Event of Default
described in clause (a) or (b) of the preceding paragraph, the
Trustee may, and at the written request of Owners of not less
than 33% in principal amount of Bonds then Outstanding shall, by
written notice to the City and the Company, declare the Bonds to
be immediately due and payable, whereupon they shall, without
further action, become and be immediately due and payable,
anything in this Ordinance or in the Bonds to the contrary
notwithstanding, and the Trustee shall give notice thereof by
Mail to all Owners of Outstanding Bonds.
The provisions of the preceding paragraph, however, are
subject to the condition that if, after the principal of the
Bonds shall have been so declared to be 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, the
City shall cause to be deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all
Bonds and the principal of any and all Bonds which shall have
become due otherwise than by reason of such declaration (with
interest upon such principal and, to the extent permissible by
law, on overdue installments of interest, at the rate per annum
borne by the Bonds) and such amounts as shall be sufficient to
cover reasonable compensation and reimbursement of expenses
payable to the Trustee and any predecessor Trustee, and all
Events of Default hereunder other than nonpayment of the
principal of Bonds which shall have become due by said
declaration shall have been remedied, then, in every such case,
such Event of Default shall be deemed waived and such declaration
and its consequences rescinded and annulled, and the Trustee
shall promptly give written notice of such waiver, rescission and
annulment to the City and the Company, and, if notice of the
acceleration of the Bonds shall have been given to the Owners of
the Bonds, shall give notice thereof by Mail to all Owners of
Outstanding Bonds; but no such waiver, rescission and annulment
shall extend to or affect any subsequent Event of Default or
impair any right or remedy consequent thereon.
Section 9.02. Remedies. Upon the occurrence and
continuance of any Event of Default, then and in every such case
the Trustee in its discretion may, and upon the written request
of Owners of not less than a majority in principal amount of the
Bonds then Outstanding and receipt of indemnity to its
satisfaction shall, in its own name and as the Trustee of an
express trust:
(a) by mandamus, or other suit, action or proceeding at
law or in equity, enforce all rights of the Owners of the
Bonds, and require the City or the Company to carry out any
agreements with or for the benefit of such Owners and to
perform its or their duties under the Act, the Sale
Agreement and this Ordinance;
(b) bring suit upon the Bonds; or
(c) by action or suit in equity enjoin any acts or
things which may be unlawful or in violation of the rights
of the Owners of the Bonds.
Section 9.03. Restoration to Former Position. In the event
that any proceeding taken by the Trustee to enforce any right
under this Ordinance shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the
Trustee, then the City, the Trustee and the Owners shall be
restored, subject to any determination in such proceeding, to
their former positions and rights hereunder, respectively, and
all rights, remedies and powers of the Trustee shall continue as
though no such proceeding had been taken.
Section 9.04. Owners' Right to Direct Proceedings.
Anything in this Ordinance to the contrary notwithstanding, the
Owners of a majority in principal amount of the Bonds then
Outstanding hereunder shall have the right, by an instrument in
writing executed and delivered to the Trustee, to direct the
time, method and place of conducting all remedial proceedings
available to the Trustee under this Ordinance or exercising any
trust or power conferred on the Trustee by this Ordinance;
provided, however, that such direction shall not be otherwise
than in accordance with law and the provisions of this Ordinance
and that the Trustee shall have the right (but not the
obligation) to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the
action or proceeding so directed may not lawfully be taken, or if
the Trustee in good faith shall determine that the action or
proceedings so directed would involve the Trustee in personal
liability or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Owners
not joining in the giving of said direction, it being understood
that the Trustee shall have no duty to ascertain whether or not
such actions or forbearances are unduly prejudicial to such
Owners.
Section 9.05. Limitation on Owners' Right to Institute
Proceedings. No Owner of Bonds shall have any right to institute
any suit, action or proceeding in equity or at law for the
execution of any trust or power hereunder, or any other remedy
hereunder or on said Bonds, unless such Owner previously shall
have given to the Trustee written notice of an Event of Default
as hereinabove provided and unless the Owners of not less than a
majority in principal amount of the Bonds then Outstanding shall
have made written request of the Trustee so to do, after the
right to institute said suit, action or proceeding shall have
accrued, and shall have afforded the Trustee a reasonable
opportunity to proceed to institute the same in either its or
their name, and unless there also shall have been offered to the
Trustee security and indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee shall not have complied with such
request within a reasonable time; and such notification, request
and offer of indemnity are hereby declared in every such case, at
the option of the Trustee, to be conditions precedent to the
institution of said suit, action or proceeding; it being
understood and intended that no one or more of the Owners of the
Bonds shall have any right in any manner whatever by his or their
action to affect, disturb or prejudice the security of this
Ordinance, or to enforce any right hereunder or under the Bonds,
except in the manner herein provided, and that all suits, actions
and proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal
benefit of all Owners of the Bonds.
Section 9.06. No Impairment of Right to Enforce Payment.
Notwithstanding any other provision in this Ordinance, the right
of any Owner of a Bond to receive payment of the principal of and
premium, if any, and interest on such Bond, on or after the
respective due dates expressed therein, or to institute suit for
the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of
such Owner.
Section 9.07. Proceedings by Trustee without Possession of
Bonds. All rights of action under this Ordinance or under any of
the Bonds secured hereby which are enforceable by the Trustee may
be enforced by it without the possession of any of the Bonds, or
the production thereof on the trial or other proceedings relative
thereto, and any such suit, action or proceeding instituted by
the Trustee shall be brought in its name for the equal and
ratable benefit of the Owners of the Bonds, subject to the
provisions of this Ordinance.
Section 9.08. No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Trustee or to the Owners of the
Bonds is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and
shall be in addition to every other remedy given hereunder or
under the Sale Agreement, now or hereafter existing at law or in
equity or by statute.
Section 9.09. No Waiver of Remedies. No delay or omission
of the Trustee or of any Owner of a Bond 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 of any such default,
or an acquiescence therein; and every power and remedy given by
this Article IX to the Trustee and to the Owners of the Bonds,
respectively, may be exercised from time to time and as often as
may be deemed expedient.
Section 9.10. Application of Moneys. Any moneys received
by the Trustee, by any receiver or by any Owner of a Bond
pursuant to any right given or action taken under the provisions
of this Article IX, after payment of the costs and expenses of
the proceedings resulting in the collection of such moneys and of
all amounts due to the Trustee and any predecessor Trustee under
Section 10.04 hereof, shall be deposited in the Bond Fund and all
moneys so deposited in the Bond Fund during the continuance of an
Event of Default (other than moneys for the payment of Bonds
which had matured or otherwise become payable prior to such Event
of Default or for the payment of interest due prior to such Event
of Default) shall be applied as follows:
(a) Unless the principal of all the Bonds shall have
become due and payable, all such moneys shall be applied (i)
first, to the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, with
interest on overdue installments, if lawful, at the rate per
annum borne by the Bonds, in the order of maturity of the
installments of such interest and, if the amount available
shall not be sufficient to pay in full any particular
installment of interest, then to the payment ratably,
according to the amounts due on such installment, and (ii)
second, to the payment to the persons entitled thereto of
the unpaid principal of any of the Bonds which shall have
become due (other than Bonds called for redemption for the
payment of which money is held pursuant to the provisions of
this Ordinance), with interest on such Bonds at their rate
from the respective dates upon which they became due and, if
the amount available shall not be sufficient to pay in full
Bonds due on any particular date, together with such
interest, then to the payment ratably, according to the
amount of principal and interest due on such date, in each
case to the persons entitled thereto, without any
discrimination or privilege.
(b) If the principal of all the Bonds shall have become
due and payable, all such moneys shall be applied to the
payment of the principal and interest then due and unpaid
upon the Bonds, with interest on overdue interest and
principal, as aforesaid, without preference or priority of
principal over interest or of interest over principal, or of
any installment of interest over any other installment of
interest, or of any Bond over any other Bond, ratably,
according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any
discrimination or privilege.
(c) If the principal of all the Bonds shall have become
due and payable, and if acceleration of the maturity of the
Bonds by reason of such Event of Default shall thereafter
have been rescinded and annulled under the provisions of
this Article IX, then, subject to the provisions of clause
(b) of this Section 9.10 which shall be applicable in the
event that the principal of all the Bonds shall later become
due and payable, the moneys shall be applied in accordance
with the provisions of clause (a) of this Section 9.10.
Section 9.11. Severability of Remedies. It is the purpose
and intention of this Article IX to provide rights and remedies
to the Trustee and the Owners which may be lawfully granted under
the provisions of the Act, but should any right or remedy herein
granted be held to be unlawful, the Trustee and the Owners shall
be entitled, as above set forth, to every other right and remedy
provided in this Ordinance and by law.
Section 9.12. No Obligation of City to Act. Subject to
Sections 7.04 and 7.05, the City shall have no obligation to take
any action or pursue any right or remedy of the Trustee or any
Owner under this Ordinance or otherwise, including, but not
limited to, taking any action in a bankruptcy proceeding.
ARTICLE X
TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR
Section 10.01. Acceptance of Trusts. By executing the
Acceptance of the Duties of the Trustee and the certificate of
authentication with respect to each of the Bonds, the Trustee
shall signify its acceptance and agreement to execute the trusts
hereby created, but only upon the additional terms set forth in
this Article X, to all of which the City agrees and the
respective Owners agree by their acceptance of delivery of any of
the Bonds.
Section 10.02. No Responsibility for Recitals. The
recitals, statements and representations contained in this
Ordinance or in the Bonds, save only the Trustee's authentication
upon the Bonds, are not made by the Trustee, and the Trustee does
not assume, and shall not have, any responsibility or obligation
for the correctness of any thereof. The Trustee makes no
representation as to the validity or sufficiency of this
Ordinance or the Bonds.
Section 10.03. Limitations on Liability. The Trustee may
execute any of the trusts or powers hereof and perform the duties
required of it hereunder by or through attorneys, agents,
receivers, or employees, and shall be entitled to advice of
counsel concerning all matters of trust and its duty hereunder,
and the Trustee shall not be answerable for the default or
misconduct of any such attorney, agent, receiver, or employee
selected by it with reasonable care. The Trustee shall not be
answerable for the exercise of any discretion or power under this
Ordinance or for anything whatsoever in connection with the trust
created hereby, except only for its own negligence or bad faith.
Anything in this Ordinance to the contrary notwithstanding,
the Trustee shall in no event be required to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for
believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
Section 10.04. Compensation, Expenses and Advances. The
Trustee, the Paying Agent and any Co-Paying Agent, and the
Registrar under this Ordinance shall be entitled to reasonable
compensation for their services rendered hereunder (not limited
by any provision of law regarding the compensation of the trustee
of an express trust) and to reimbursement for their actual
out-of-pocket expenses (including counsel fees) reasonably
incurred in connection therewith except as a result of their
negligence or bad faith, including, without limitation,
compensation for any services rendered, and reimbursement for any
expenses incurred, at and subsequent to the time the Bonds are
deemed to have been paid in accordance with Article VIII hereof.
If the City shall fail to perform any of the covenants or
agreements contained in this Ordinance, other than the covenants
or agreements in respect of the payment of the principal of and
premium, if any, and interest on the Bonds, the Trustee may, in
its uncontrolled discretion and without notice to the Owners of
the Bonds, at any time and from time to time, make advances to
effect performance of the same on behalf of the City, but the
Trustee shall be under no obligation so to do; and any and all
such advances may bear interest at a rate per annum not exceeding
the base rate then in effect for 90-day commercial loans by the
Trustee or a commercial banking affiliate of the Trustee
designated as such by the Trustee in the city in which is located
the Principal Office of the Trustee (or such affiliate, as the
case may be) to borrowers of the highest credit standing; but no
such advance shall operate to relieve the City from any default
hereunder. In Section 5.04 of the Sale Agreement, the Company
has agreed that it will pay to the Trustee (including any
predecessor Trustee), the Paying Agent and any Co-Paying Agent
and the Registrar, such compensation and reimbursement of
expenses and advances, but the Company may, without creating a
default hereunder, contest in good faith the reasonableness of
any such services, expenses and advances. If the Company shall
have failed to make any payment to the Trustee or any predecessor
Trustee under Section 5.04 of the Sale Agreement and such failure
shall have resulted in an Event of Default under the Sale
Agreement, the Trustee, and any predecessor Trustee, shall have,
in addition to any other rights hereunder, a claim, prior to the
claim of the Owners, for the payment of its compensation and the
reimbursement of its expenses and any advances made by it, as
provided in this Section 10.04, upon the moneys and obligations
in the Bond Fund; provided, however, that neither the Trustee nor
any predecessor Trustee shall have any such claim upon moneys or
obligations deposited with or paid to the Trustee for the
redemption or payment of Bonds which are deemed to have been paid
in accordance with Article VIII hereof.
In Section 5.05 of the Sale Agreement, the Company has
agreed to indemnify the Trustee and any predecessor Trustee to
the extent provided therein.
Section 10.05. Notice of Events of Default. The Trustee
shall not be required to take notice, or be deemed to have
notice, of any default or Event of Default under this Ordinance
other than an Event of Default under clause (a) or (b) of the
first paragraph of Section 9.01 hereof, unless an officer
assigned by the Trustee to administer its corporate trust
business has been specifically notified in writing of such
default or Event of Default by Owners of at least 33% in
principal amount of the Bonds then Outstanding. The Trustee may,
however, at any time, in its discretion, require of the City and
the Company full information and advice as to the performance of
any of the covenants, conditions and agreements contained herein.
Section 10.06. Action by Trustee. The Trustee shall be
under no obligation to take any action in respect of any default
or Event of Default hereunder or toward the execution or
enforcement of any of the trusts hereby created, or to institute,
appear in or defend any suit or other proceeding in connection
therewith, unless requested in writing so to do by Owners of a
majority in principal amount of the Bonds then Outstanding, and,
if in its opinion such action may tend to involve it in expense
or liability, unless furnished, from time to time as often as it
may require, with security and indemnity satisfactory to it. The
foregoing provisions are intended only for the protection of the
Trustee, and shall not affect any discretion or power given by
any provisions of this Ordinance to the Trustee to take action in
respect of any default or Event of Default without such notice or
request from the Owners of the Bonds, or without such security or
indemnity.
Section 10.07. Good Faith Reliance. The Trustee shall be
protected and shall incur no liability in acting or proceeding in
good faith upon any resolution, notice, telegram, telex,
facsimile transmission, request, consent, waiver, certificate,
statement, affidavit, voucher, bond, requisition or other paper
or document which it shall in good faith believe to be genuine
and to have been passed or signed by the proper board, body or
person or to have been prepared and furnished pursuant to any of
the provisions of this Ordinance or the Sale Agreement, or upon
the written opinion of any attorney, engineer, accountant or
other expert believed by the Trustee to be qualified in relation
to the subject matter, and the Trustee shall be under no duty to
make any investigation or inquiry as to any statements contained
or matters referred to in any such instrument, but may accept and
rely upon the same as conclusive evidence of the truth and
accuracy of such statements. Neither the Trustee, the Paying
Agent, any Co-Paying Agent nor the Registrar shall be bound to
recognize any person as an Owner of a Bond or to take any action
at his request unless the ownership of such Bond is proved as
contemplated in Section 11.01 hereof.
Section 10.08. Dealings in Bonds and with the City and the
Company. The Trustee, the Paying Agent, any Co-Paying Agent or
the Registrar, in its individual or any other capacity, may in
good faith buy, sell, own, hold and deal in any of the Bonds
issued hereunder, and may join in any action which any Owner of a
Bond may be entitled to take with like effect as if it did not
act in any capacity hereunder. The Trustee, the Paying Agent,
any Co-Paying Agent or the Registrar, in its individual or any
other capacity, either as principal or agent, may also engage in
or be interested in any financial or other transaction with the
City or the Company, and may act as depositary, trustee, or agent
for any committee or body of Owners of Bonds secured hereby or
other obligations of the City as freely as if it did not act in
any capacity hereunder.
Section 10.09. Allowance of Interest. The Trustee may, but
shall not be obligated to, allow and credit interest upon any
moneys which it may at any time receive under any of the
provisions of this Ordinance, at such rate, if any, as it
customarily allows upon similar funds of similar size and under
similar conditions. All interest allowed on any such moneys
shall be credited as provided in Article IV with respect to
interest on investments.
Section 10.10. Construction of Ordinance. The Trustee may
construe any of the provisions of this Ordinance insofar as the
same may appear to be ambiguous or inconsistent with any other
provision hereof, and any construction of any such provisions
hereof by the Trustee in good faith shall be binding upon the
Owners of the Bonds.
Section 10.11. Resignation of Trustee. The Trustee may
resign and be discharged of the trusts created by this Ordinance
by executing an instrument in writing resigning such trust and
specifying the date when such resignation shall take effect, and
filing the same with the City Clerk of the City and with the
Company, not less than forty-five (45) days before the date
specified in such instrument when such resignation shall take
effect, and by giving notice of such resignation by Mail to all
Owners of Bonds. Such resignation shall take effect on the later
to occur of (i) the day specified in such instrument and notice,
unless previously a successor Trustee shall have been appointed
as hereinafter provided, in which event such resignation shall
take effect immediately upon the appointment of such successor
Trustee and (ii) the appointment of a successor Trustee.
So long as no event which is, or after notice or lapse of
time, or both, would become, an Event of Default shall have
occurred and be continuing, if the City shall have delivered to
the Trustee (i) an instrument appointing a successor Trustee,
effective as of a date specified therein and (ii) an instrument
of acceptance of such appointment, effective as of such date, by
such successor Trustee in accordance with Section 10.16, the
Trustee shall be deemed to have resigned as contemplated in this
Section, the successor Trustee shall be deemed to have been
appointed pursuant to subsection (b) of Section 10.13 and such
appointment shall be deemed to have been accepted as contemplated
in Section 10.16, all as of such date, and all other provisions
of this Article X shall be applicable to such resignation,
appointment and acceptance except to the extent inconsistent with
this paragraph. The City shall deliver any such instrument of
appointment at the direction of the Company.
Section 10.12. Removal of Trustee. The Trustee may be
removed at any time by filing with the Trustee so removed, and
with the City and the Company, an instrument or instruments in
writing, appointing a successor, or an instrument or instruments
in writing, consenting to the appointment by the City (at the
direction of the Company) of a successor and accompanied by an
instrument of appointment by the City (at the direction of the
Company) of such successor, and in any event executed by Owners
of not less than a majority in principal amount of the Bonds then
Outstanding, such filing to be made by any Owner of a Bond or his
duly authorized attorney.
Section 10.13. Appointment of Successor Trustee. (a) In
case at any time the Trustee shall be removed, or be dissolved,
or if its property or affairs shall be taken under the control of
any state or federal court or administrative body because of
insolvency or bankruptcy, or for any other reason, then a vacancy
shall forthwith and ipso facto exist and a successor may be
appointed, and in case at any time the Trustee shall resign or be
deemed to have resigned, then a successor may be appointed, by
filing with the City and the Company an instrument in writing
appointing such successor Trustee executed by Owners of not less
than a majority in principal amount of Bonds then Outstanding.
Copies of such instrument shall be promptly delivered by the City
to the predecessor Trustee to the Trustee so appointed and the
Company.
(b) Until a successor Trustee shall be appointed by the
Owners of the Bonds as herein authorized, the City, by an
instrument authorized by resolution, shall appoint a successor
Trustee as directed by the Company. After any appointment by the
City, it shall cause notice of such appointment to be given by
Mail to all Owners of Bonds. Any new Trustee so appointed by the
City shall immediately and without further act be superseded by a
Trustee appointed by the Owners of the Bonds in the manner above
provided.
(c) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee.
Section 10.14. Qualifications of Successor Trustee. Every
successor Trustee (a) shall be a bank or trust company duly
organized under the laws of the United States or any state or
territory thereof authorized by law to perform all the duties
imposed upon it by this Ordinance and (b) shall have (or the
parent holding company of which shall have) a combined capital
stock, surplus and undivided profits of at least $100,000,000 if
there can be located, with reasonable effort, such an institution
willing and able to accept the trust on reasonable and customary
terms.
Section 10.15. Judicial Appointment of Successor Trustee.
In case at any time the Trustee shall resign and no appointment
of a successor Trustee shall be made pursuant to the foregoing
provisions of this Article X prior to the date specified in the
notice of resignation as the date when such resignation is to
take effect, the retiring Trustee may forthwith apply to a court
of competent jurisdiction for the appointment of a successor
Trustee. If no appointment of a successor Trustee shall be made
pursuant to the foregoing provisions of this Article X within six
months after a vacancy shall have occurred in the office of
Trustee, any Owner of a Bond may apply to any court of competent
jurisdiction to appoint a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
Section 10.16. Acceptance of Trusts by Successor Trustee.
Any successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the City an instrument accepting such
appointment hereunder, and thereupon such successor Trustee,
without any further act, deed or conveyance, shall become duly
vested with all the estates, property, rights, powers, trusts,
duties and obligations of its predecessor in the trust hereunder,
with like effect as if originally named Trustee herein. Upon
request of such Trustee, such predecessor Trustee and the City
shall execute and deliver an instrument transferring to such
successor Trustee all the estates, property, rights, powers and
trusts hereunder of such predecessor Trustee and, subject to the
provisions of Section 10.04 hereof, such predecessor Trustee
shall pay over to the successor Trustee all moneys and other
assets at the time held by it hereunder.
Section 10.17. Successor by Merger or Consolidation. Any
corporation or association into which any Trustee hereunder may
be merged or converted or with which it may be consolidated, or
any corporation or association resulting from any merger or
consolidation to which any Trustee hereunder shall be a party or
any corporation or association succeeding to the corporate trust
business of the Trustee, shall be the successor Trustee under
this Ordinance, without the execution or filing of any paper or
any further act on the part of the parties hereto, anything in
this Ordinance to the contrary notwithstanding.
If, at the time any such successor to the Trustee shall
succeed to the trusts created by this Ordinance, any of the Bonds
shall have been authenticated but not delivered, such successor
Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver such Bonds so authenticated; and
if at that time, any of the Bonds shall not have been
authenticated, such successor Trustee may authenticate such Bonds
either in the name of any such predecessor hereunder or in the
name of such successor; and, in all such cases, such certificate
of authentication shall have the full force which it is anywhere
in the Bonds or in this Ordinance provided that the certificate
of authentication of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Bonds in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 10.18. Standard of Care. Notwithstanding any other
provisions of this Article X, the Trustee shall, during the
existence of an Event of Default of which the Trustee has actual
notice, exercise such of the rights and powers vested in it by
this Ordinance and use the same degree of skill and care in their
exercise as a prudent man would use and exercise under the
circumstances in the conduct of his own affairs.
Section 10.19. Notice to Owners of Bonds of Event of
Default. If an Event of Default occurs of which the Trustee by
Section 10.05 hereof is required to take notice and deemed to
have notice, or any other Event of Default occurs of which the
Trustee has been specifically notified in accordance with Section
10.05 hereof, and any such Event of Default shall continue for at
least two days after the Trustee acquires actual notice thereof,
unless the Trustee shall have theretofore given a notice of
acceleration pursuant to Section 9.01 hereof, the Trustee shall
give Notice by Mail to all Owners of Outstanding Bonds.
Section 10.20. Intervention in Litigation of the City. In
any judicial proceeding to which the City is a party and which in
the opinion of the Trustee and its counsel has a substantial
bearing on the interests of the Owners of Bonds, the Trustee may
intervene on behalf of the Owners of the Bonds and shall, upon
receipt of indemnity satisfactory to it, do so if requested in
writing by Owners of a majority in principal amount of the Bonds
then Outstanding if permitted by the court having jurisdiction in
the premises.
Section 10.21. Paying Agent; Co-Paying Agents. The City
shall, with the approval of the Company, appoint the Paying Agent
for the Bonds and may at any time or from time to time, with the
approval of the Company, appoint one or more Co-Paying Agents for
the Bonds, subject to the conditions set forth in Section 10.22
hereof. The Paying Agent and each Co-Paying Agent shall
designate to the Trustee its Principal Office and signify its
acceptance of the duties and obligations imposed upon it
hereunder by a written instrument of acceptance delivered to the
City and the Trustee in which such Paying Agent or Co-Paying
Agent will agree, particularly:
(a) to hold all sums held by it for the payment of the
principal of and premium, if any, or interest on Bonds in
trust for the benefit of the Owners of the Bonds until such
sums shall be paid to such Owners or otherwise disposed of
as herein provided;
(b) to keep such books and records as shall be
consistent with prudent industry practice, to make such
books and records available for inspection by the City, the
Trustee and the Company at all reasonable times and, in the
case of a Co-Paying Agent, to promptly furnish copies of
such books and records to the Paying Agent; and
(c) in the case of a Co-Paying Agent, upon the request
of the Paying Agent, to forthwith deliver to the Paying
Agent all sums so held in trust by such Co-Paying Agent.
The City shall cooperate with the Trustee and the Company to
cause the necessary arrangements to be made and to be thereafter
continued whereby funds derived from the sources specified in
Sections 4.03 and 4.04 hereof will be made available to the
Paying Agent and each Co-Paying Agent for the payment when due of
the principal of, premium, if any, and interest on the Bonds.
Section 10.22. Qualifications of Paying Agent and Co-Paying
Agents; Resignation; Removal. The Paying Agent and any Co-Paying
Agent shall be a corporation or association duly organized under
the laws of the United States of America or any state or
territory thereof, having a combined capital stock, surplus and
undivided profits of at least $15,000,000 and authorized by law
to perform all the duties imposed upon it by this Ordinance. The
Paying Agent and any Co-Paying Agent may at any time resign and
be discharged of the duties and obligations created by this
Ordinance by giving at least sixty (60) days' notice to the City,
the Company and the Trustee. The Paying Agent and any Co-Paying
Agent may be removed at any time, at the direction of the
Company, by an instrument, signed by the City, filed with the
Paying Agent or such Co-Paying Agent, as the case may be, and
with the Trustee.
In the event of the resignation or removal of the Paying
Agent or any Co-Paying Agent, the Paying Agent or such Co-Paying
Agent, as the case may be, shall pay over, assign and deliver any
moneys held by it in such capacity to its successor or, if there
be no successor, to the Trustee.
In the event that the City shall fail to appoint a Paying
Agent hereunder, or in the event that the Paying Agent shall
resign or be removed, or be dissolved, or if the property or
affairs of the Paying Agent shall be taken under the control of
any state or federal court or administrative body because of
bankruptcy or insolvency, or for any other reason, and the City
shall not have appointed its successor as Paying Agent, the
Trustee shall ipso facto be deemed to be the Paying Agent for all
purposes of this Ordinance until the appointment by the City of
the Paying Agent or successor Paying Agent, as the case may be.
Upon the appointment of a successor Paying Agent, the
Trustee shall give notice thereof by Mail to all Owners of Bonds.
Section 10.23. Registrar. The City shall, with the approval
of the Company, appoint the Registrar for the Bonds, subject to
the conditions set forth in Section 10.24 hereof. The Registrar
shall designate to the Trustee its Principal Office and signify
its acceptance of the duties imposed upon it hereunder by a
written instrument of acceptance delivered to the City and the
Trustee in which such Registrar will agree, particularly, to keep
such books and records as shall be consistent with prudent
industry practice and to make such books and records available
for inspection by the City, the Trustee and the Company at all
reasonable times.
The City shall cooperate with the Trustee and the Company to
cause the necessary arrangements to be made and to be thereafter
continued whereby Bonds, executed by the City and authenticated
by the Trustee, shall be made available for exchange,
registration and registration of transfer at the Principal Office
of the Registrar. The City shall cooperate with the Trustee, the
Registrar and the Company to cause the necessary arrangements to
be made and thereafter continued whereby the Paying Agent and any
Co-Paying Agent shall be furnished such records and other
information, at such times, as shall be required to enable the
Paying Agent and such Co-Paying Agent to perform the duties and
obligations imposed upon them hereunder.
Section 10.24. Qualifications of Registrar; Resignation;
Removal. The Registrar shall be a corporation or association
duly organized under the laws of the United States of America or
any state or territory thereof, having a combined capital stock,
surplus and undivided profits of at least $15,000,000 and
authorized by law to perform all the duties imposed upon it by
this Ordinance. The Registrar may at any time resign and be
discharged of the duties and obligations created by this
Ordinance by giving at least sixty (60) days' notice to the City,
the Trustee and the Company. The Registrar may be removed at any
time, at the direction of the Company, by an instrument signed by
the City filed with the Registrar and the Trustee.
In the event of the resignation or removal of the Registrar,
the Registrar shall deliver any Bonds held by it in such capacity
to its successor or, if there be no successor, to the Trustee.
In the event that the City shall fail to appoint a Registrar
hereunder, or in the event that the Registrar shall resign or be
removed, or be dissolved, or if the property or affairs of the
Registrar shall be taken under the control of any state or
federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and the City shall not have
appointed its successor as Registrar, the Trustee shall ipso
facto be deemed to be the Registrar for all purposes of this
Ordinance until the appointment by the City of the Registrar or
successor Registrar, as the case may be.
Upon the appointment of a successor Registrar, the Trustee
shall give notice thereof by Mail to all Owners of Bonds.
Section 10.25. Several Capacities. Anything herein to the
contrary notwithstanding, the same entity may serve hereunder as
the Trustee, the Paying Agent or a Co-Paying Agent and the
Registrar and in any combination of such capacities to the extent
permitted by law.
ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
PROOF OF OWNERSHIP OF BONDS
Section 11.01. Execution of Instruments; Proof of Ownership.
Any request, direction, consent or other instrument in writing,
whether or not required or permitted by this Ordinance to be
signed or executed by Owners of the Bonds, may be in any number
of concurrent instruments of similar tenor and may be signed or
executed by Owners of the Bonds or by an agent appointed by an
instrument in writing. Proof of the execution of any such
instrument and of the ownership of Bonds shall be sufficient for
any purpose of this Ordinance and shall be conclusive in favor of
the Trustee with regard to any action taken by it under such
instrument if made in the following manner:
(a) The fact and date of the execution by any person of
any such instrument may be proved by the certificate of any
officer in any jurisdiction who, by the laws thereof, has
power to take acknowledgments within such jurisdiction, to
the effect that the person signing such instrument
acknowledged before him the execution thereof, or by an
affidavit of a witness to such execution.
(b) The ownership or former ownership of Bonds shall be
proved by the registration books kept under the provisions
of Section 2.08 hereof.
Nothing contained in this Article XI shall be construed as
limiting the Trustee to such proof, it being intended that the
Trustee may accept any other evidence of matters herein stated
which it may deem sufficient. Any request or consent of any
Owner of a Bond shall bind every future Owner of the same Bond or
any Bond or Bonds issued in lieu thereof in respect of anything
done by the Trustee or the City in pursuance of such request or
consent.
ARTICLE XII
MODIFICATION OF THIS ORDINANCE AND THE SALE AGREEMENT
Section 12.01. Limitations. Neither this Ordinance nor the
Sale Agreement shall be modified or amended in any respect
subsequent to the original issuance of the Bonds except as
provided in and in accordance with and subject to the provisions
of this Article XII and Section 7.04 hereof.
The Trustee may, but shall not be obligated to, accept any
Supplemental Ordinance which affects the Trustee's own rights,
duties or immunities under this Ordinance or otherwise.
Section 12.02. Supplemental Ordinances without Owner
Consent. The City may, from time to time and at any time,
without the consent of or notice to the Owners of the Bonds,
adopt, and the Trustee may accept, Supplemental Ordinances as
follows:
(a) to cure any formal defect, omission, inconsistency
or ambiguity in this Ordinance, provided, however, that such
cure shall not materially and adversely affect the interests
of the Owners of the Bonds;
(b) to grant to or confer or impose upon the Trustee
for the benefit of the Owners of the Bonds any additional
rights, remedies, powers, authority, security, liabilities
or duties which may lawfully be granted, conferred or
imposed;
(c) to add to the covenants and agreements of, and
limitations and restrictions upon, the City in this
Ordinance other covenants, agreements, limitations and
restrictions to be observed by the City;
(d) to confirm, as further assurance, any pledge under,
and the subjection to any claim, lien or pledge created or
to be created by, this Ordinance, of the Receipts and
Revenues of the City from the Sale Agreement or of any other
moneys, securities or funds;
(e) to authorize a different denomination or
denominations of the Bonds and to make correlative
amendments and modifications to this Ordinance regarding
exchange ability of Bonds of different denominations,
redemptions of portions of Bonds of particular denominations
and similar amendments and modifications of a technical
nature;
(f) to modify, alter, supplement or amend this
Ordinance in such manner as shall permit the qualification
hereof under the Trust Indenture Act of 1939, as from time
to time amended;
(g) to modify, alter, supplement or amend this
Ordinance in such manner as shall be necessary, desirable or
appropriate in order to provide for or eliminate the
registration and registration of transfer of the Bonds
through a book-entry or similar method, whether or not the
Bonds are evidenced by certificates;
(h) to modify, alter, amend or supplement this
Ordinance in any other respect which is not materially
adverse to the Owners and which does not involve a change
described in clause (i), (ii), (iii) or (iv) of Section
12.03(a) hereof; and
(i) to provide any additional procedures, covenants or
agreements necessary or desirable to maintain the tax-exempt
status of interest on the Bonds.
Before the City shall adopt, and the Trustee shall accept,
any Supplemental Ordinance pursuant to this Section 12.02, there
shall have been delivered to the City and the Trustee an opinion
of Bond Counsel stating that such Supplemental Ordinance is
authorized or permitted by this Ordinance and the Act, complies
with their respective terms, will, upon the adoption thereof, be
valid and binding upon the City in accordance with its terms and
will not, in and of itself, adversely affect the exclusion from
gross income for federal tax purposes of the interest on the
Bonds.
Section 12.03. Supplemental Ordinances with Consent of
Owners. (a) Except for any Supplemental Ordinance adopted
pursuant to Section 12.02 hereof, subject to the terms and
provisions contained in this Section 12.03 and Section 12.05 and
not otherwise, Owners of not less than a majority in aggregate
principal amount of the Bonds then Outstanding which would be
adversely affected thereby shall have the right from time to time
to consent to and approve the adoption by the City, and
acceptance by the Trustee, of any Supplemental Ordinance deemed
necessary or desirable by the City for the purposes of modifying,
altering, amending, supplementing or rescinding, in any
particular, any of the terms or provisions contained in this
Ordinance; provided, however, that, unless approved in writing by
the Owners of all the Bonds then Outstanding which would be
adversely affected thereby, nothing herein contained shall
permit, or be construed as permitting, (i) a change in the times,
amounts or currency of payment of the principal of or premium, if
any, or interest on any Outstanding Bond, a reduction in the
principal amount or redemption price of any Outstanding Bond or a
change in the rate of interest thereon, or any impairment of the
right of any Owner to institute suit for the payment of any Bond
owned by it, or (ii) the creation of a claim or lien upon, or a
pledge of, the Receipts and Revenues of the City from the Sale
Agreement ranking prior to or on a parity with the claim, lien or
pledge created by this Ordinance (except as referred to in
Section 10.04 hereof), or (iii) a preference or priority of any
Bond or Bonds over any other Bond or Bonds, or (iv) a reduction
in the aggregate principal amount of Bonds the consent of the
Owners of which is required for any such Supplemental Ordinance
or which is required, under Section 12.07 hereof, for any
modification, alteration, amendment or supplement to the Sale
Agreement.
(b) If at any time the City shall request the Trustee to
accept any Supplemental Ordinance for any of the purposes of this
Section 12.03, the Trustee shall cause notice of the proposed
Supplemental Ordinance to be given by Mail to all Owners of
Outstanding Bonds. Such notice shall briefly set forth the
nature of the proposed Supplemental Ordinance and shall state
that a copy thereof is on file at the Principal Office of the
Trustee for inspection by all Owners of Bonds.
(c) Within two years after the date of the first mailing of
such notice, the City may adopt, and the Trustee may accept, such
Supplemental Ordinance in substantially the form described in
such notice only if there shall have first been delivered to the
Trustee (i) the required consents, in writing, of Owners of Bonds
and (ii) an opinion of Bond Counsel stating that such
Supplemental Ordinance is authorized or permitted by this
Ordinance and the Act, complies with their respective terms and,
upon the adoption thereof, will be valid and binding upon the
City in accordance with its terms and will not, in and of itself,
adversely affect the exclusion from gross income for federal tax
purposes of the interest on the Bonds.
(d) If Owners of not less than the percentage of Bonds
required by this Section 12.03 shall have consented to and
approved the execution and delivery thereof as herein provided,
no Owner shall have any right to object to the adoption of such
Supplemental Ordinance, or to object to any of the terms and
provisions contained therein or the operation thereof, or in any
manner to question the propriety of the adoption thereof, or to
enjoin or restrain the City or the Trustee from executing and
delivering the same or from taking any action pursuant to the
provisions thereof.
Section 12.04. Effect of Supplemental Ordinance. Upon the
adoption of any Supplemental Ordinance pursuant to the provisions
of this Article XII, this Ordinance shall be, and be deemed to
be, modified, altered, amended or supplemented in accordance
therewith, and the respective rights, duties and obligations
under this Ordinance of the City, the Trustee and Owners of all
Bonds then Outstanding shall thereafter be determined, exercised
and enforced under this Ordinance subject in all respects to such
modifications, alterations, amendments and supplements.
Section 12.05. Consent of the Company. Anything herein to
the contrary notwithstanding, any Supplemental Ordinance under
this Article XII which affects any rights, powers, agreements or
obligations of the Company under the Sale Agreement, or requires
a revision of the Sale Agreement, shall not become effective
unless and until the Company shall have consented to such
Supplemental Ordinance.
Section 12.06. Amendment of Sale Agreement without Consent
of Owners. Without the consent of or notice to the Owners of the
Bonds, the City may enter into any Supplemental Sale Agreement,
and the Trustee may consent thereto, as may be required (a) by
the provisions of the Sale Agreement and this Ordinance, (b) for
the purpose of curing any formal defect, omission, inconsistency
or ambiguity therein, (c) to provide any additional procedures,
covenants or agreements necessary or desirable to maintain the
tax-exempt status of interest on the Bonds, or (d) in connection
with any other change therein which is not materially adverse to
the Owners of the Bonds.
Before the City shall enter into, and the Trustee shall
consent to, any Supplemental Sale Agreement pursuant to this
Section 12.06, there shall have been delivered to the City and
the Trustee an opinion of Bond Counsel stating that such
Supplemental Sale Agreement is authorized or permitted by this
Ordinance and the Act, complies with their respective terms,
will, upon the execution and delivery thereof, be valid and
binding upon the City and the Company in accordance with its
terms and will not, in and of itself, adversely affect the
exclusion from gross income for federal tax purposes of interest
on the Bonds.
Section 12.07. Amendment of Sale Agreement with Consent of
Owners. Except in the case of Supplemental Sale Agreements
referred to in Section 12.06 hereof, the City shall not enter
into, and the Trustee shall not consent to, any Supplemental Sale
Agreement without the written approval or consent of the Owners
of not less than a majority in aggregate principal amount of the
Bonds then Outstanding which would be adversely affected thereby,
given and procured as provided in Section 12.03 hereof; provided,
however, that, unless approved in writing by the Owners of all
Bonds then Outstanding which would be adversely affected thereby,
nothing herein contained shall permit, or be construed as
permitting, a change in the obligations of the Company under
Section 5.02 of the Sale Agreement. If at any time the City or
the Company shall request the consent of the Trustee to any such
proposed Supplemental Sale Agreement, the Trustee shall cause
notice of such proposed Supplemental Sale Agreement to be given
in the same manner as provided by Section 12.03 hereof with
respect to Supplemental Ordinances. Such notice shall briefly
set forth the nature of such proposed Supplemental Sale Agreement
and shall state that copies of the instrument embodying the same
are on file at the Principal Office of the Trustee for inspection
by all Owners of the Bonds. The City may enter into, and the
Trustee may consent to, any such proposed Supplemental Sale
Agreement subject to the same conditions, and with the same
effect, as provided by Section 12.03 hereof with respect to
Supplemental Ordinances.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Successors of the City. In the event of the
dissolution of the City, all the covenants, stipulations,
promises and agreements in this Ordinance contained, by or on
behalf of, or for the benefit of, the City, shall bind or inure
to the benefit of the successors of the City from time to time
and any entity, officer, board, commission, agency or
instrumentality to whom or to which any power or duty of the City
shall be transferred.
Section 13.02. Parties in Interest. Except as herein
otherwise specifically provided, nothing in this Ordinance
expressed or implied is intended or shall be construed to confer
upon any person, firm or corporation other than the City, the
Company and the Trustee and their successors and assigns and the
Owners of the Bonds any right, remedy or claim under or by reason
of this Ordinance, this Ordinance being intended to be for the
sole and exclusive benefit of the City, the Company and the
Trustee and their successors and assigns and the Owners of the
Bonds.
Section 13.03. Ratification of Prior Action. All action
(not inconsistent with the provisions of this Ordinance)
heretofore taken by the City Council and the officers of the City
directed toward the refunding of the Prior Bonds and sale and
issuance of the Bonds and all action taken in connection with the
use of proceeds of the Prior Bonds insofar as consistent with the
Act, is ratified, approved and confirmed.
Section 13.04. Severability. In case any one or more of the
provisions of this Ordinance or of the Sale Agreement or of the
Bonds shall, for any reason, be held to be illegal or invalid,
such illegality or invalidity shall not affect any other
provisions of this Ordinance or of the Sale Agreement or of such
Bonds, and this Ordinance and the Sale Agreement and such Bonds
shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein or therein.
Section 13.05. No Personal Liability of City Officials. No
covenant or agreement contained in the Bonds or in this Ordinance
shall be deemed to be the covenant or agreement of any director,
official, officer, agent, or employee of the City in his
individual capacity, and neither the members of the City Council
of the City nor any official executing the Bonds shall be liable
personally on the Bonds or be subject to any personal liability
or accountability by reason of the issuance thereof.
Section 13.06. Bonds Owned by the City or the Company. In
determining whether Owners of the requisite aggregate principal
amount of the Bonds have concurred in any direction, consent or
waiver under this Ordinance, Bonds which are owned by the City or
the Company or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with
the Company (unless the City, the Company or such person owns all
Bonds which are then Outstanding, determined without regard to
this Section 13.05) shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except
that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver,
only Bonds which the Trustee knows are so owned shall be so
disregarded. Upon the request of the Trustee, the Company and
the City shall furnish to the Trustee a certificate identifying
all Bonds, if any, actually known to either of them to be owned
or held by or for the account of any of the above-described
persons, and the Trustee shall be entitled to rely on such
certificate as conclusive evidence of the facts set forth therein
and that all other Bonds are Outstanding for the purposes of such
determination. Bonds so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the City
or the Company or any person directly or indirectly controlling
or controlled by or under direct or indirect common control with
the Company. In case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
Section 13.07. Acceptance by Trustee. The execution by the
party designated and appointed as Trustee of the acceptance set
forth at the end of this Ordinance certified by the City Clerk of
the City shall be sufficient to constitute said party as the
Trustee hereunder in accordance with the provisions hereof
without the execution of any other instrument.
Section 13.08. Governing Law. The laws of the State of New
Mexico shall govern the construction and enforcement of this
Ordinance and of all Bonds.
Section 13.09. Notices. Except as otherwise provided in
this Ordinance, all notices, certificates, requests requisitions
or other communications by the City, the Company, the Trustee,
the Paying Agent, any Co-Paying Agent or the Registrar pursuant
to this Ordinance 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 City, at 800
Municipal Drive, Farmington, New Mexico 87401, Attention:
Treasurer; if to the Company, at 220 West Sixth Street, Tucson,
Arizona 85702, Attention: Treasurer; if to the Trustee, at the
address specified in the resolution of the City Council of the
City appointing the Trustee; if to the Paying Agent, any
Co-Paying Agent or the Registrar, at the address designated in
the acceptance of appointment or engagement. Any of the
foregoing may, by notice given hereunder to each of the others,
designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be
sent hereunder.
Section 13.10. Holidays. If the date for making any payment
or the last date for performance of any act or the exercising of
any right, as provided in this Ordinance, shall be a Saturday,
Sunday or a public holiday in the city in which is located the
Principal Office of the Trustee, such payment may be made or act
performed or right exercised on the next succeeding business day,
with the same force and effect as if done on the nominal date
provided in this Ordinance, and no interest shall accrue for the
period after such nominal date. If the last day of any period of
grace, as provided in this Ordinance, shall be a Saturday, Sunday
or a public holiday in the city in which is located the Principal
Office of the Trustee, the last day of such period of grace shall
be deemed to be the next succeeding business day.
Section 13.11. Emergency Circumstances. The City Council of
the City declares that emergency circumstances exist which are of
an immediate danger to the public health, safety and welfare of
the City and that this Ordinance shall therefore take effect five
days after publication in The Farmington Daily Times of the title
and a general summary of the subject matter thereof.
Passed, Adopted, Signed and Approved this 17th day of April,
1997.
(SEAL) /s/ Thomas C. Taylor
------------------------
Mayor
Attest:
/s/ Mary L. Banks
--------------------------------------------
City Clerk
I, Thomas C. Taylor, Mayor of the City of Farmington, New
Mexico, do hereby declare that, pursuant to Section 3-17-3
N.M.S.A. 1978, this Ordinance deals with an emergency of an
immediate danger to the public health, safety and welfare of the
City, and any publication of such Ordinance prior to its adoption
is hereby declared to be unnecessary.
/s/ Thomas C. Taylor
---------------------------------------------------------------
Mayor
ACCEPTANCE OF DUTIES BY THE TRUSTEE
First Trust of New York, National Association, as
Trustee, hereby accepts as of April 29, 1997 the trust under the
foregoing Ordinance and the duties and obligations imposed on the
Trustee thereby.
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By /s/ Patrick J. Crowley
-----------------------
Authorized Officer
Attest:
/s/ Steven Haas
----------------------------------------
Authorized Officer
EXHIBIT A
(FORM OF BOND)
No.
CITY OF FARMINGTON, NEW MEXICO
POLLUTION CONTROL REVENUE BOND,
1997 SERIES A
(TUCSON ELECTRIC POWER COMPANY SAN JUAN PROJECT)
INTEREST RATE (PER ANNUM):
MATURITY DATE: DATED:
CUSIP:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Farmington, an incorporated municipality, a body
politic and corporate, existing under the Constitution and laws
of the State of New Mexico, United States of America (the
"City"), for value received, hereby promises to pay (but only out
of the Receipts and Revenues of the City from the Sale Agreement,
as hereinafter defined, and other moneys pledged therefor) to the
Registered Owner identified above or registered assigns, on the
Maturity Date set forth above, upon the presentation and
surrender hereof, the Principal Amount set forth above and to pay
(but only out of the Receipts and Revenues of the City from the
Sale Agreement and other moneys pledged therefor), interest on
said Principal Amount until payment of said Principal Amount has
been made or duly provided for, from the date hereof, at the
Interest Rate set forth above, semi-annually on the first days of
October and April in each year, commencing October 1, 1997.
Interest will be calculated on the basis of a 360-day year of
twelve 30-day months.
The principal of and premium, if any, on this Bond are
payable at the principal office of First Trust of New York,
National Association, as Paying Agent, or at the principal office
of any co-paying agent appointed in accordance with the Ordinance
(as hereinafter defined), at the option of the Registered Owner
hereof. Interest on this Bond is payable by check drawn upon the
Paying Agent and mailed to the Registered Owner of this Bond as
of the close of business on the Record Date (as defined in the
Ordinance), at the registered address of such Registered Owner;
notwithstanding the foregoing, upon request to the Paying Agent
by a Registered Owner of not less than $1,000,000 in aggregate
principal amount of Bonds, interest on such Bonds and, after
presentation and surrender of such Bonds, the principal thereof
shall be paid to such Registered Owner by wire transfer to the
account maintained within the continental United States specified
by such Registered Owner or, if such Registered Owner maintains
an account with the entity acting as Paying Agent, by deposit
into such account. Payment of the principal of and premium, if
any, and interest on this Bond shall be in any coin or currency
of the United States of America as, at the respective times of
payment, shall be legal tender for the payment of public and
private debts.
As more fully provided in the Ordinance, the Bonds and the
premium, if any, and interest thereon are not general obligations
to which the full faith and credit of the City are pledged, but
are limited obligations of the City, which is obligated to pay
the principal of and premium, if any, and interest on the Bonds
only out of the Receipts and Revenues of the City from the Sale
Agreement. This Bond does not, and shall never, constitute an
indebtedness of the City within the meaning of any state
constitutional provision or statutory limitation, and shall never
constitute or give rise to a pecuniary liability of the City or a
charge against its general credit or taxing powers.
This Bond is one of the duly authorized issue of bonds of
the City designated as Pollution Control Revenue Bonds, 1997
Series A (Tucson Electric Power Company San Juan Project) (the
"Bonds"), aggregating Eighty Million Four Hundred Ten Thousand
Dollars ($80,410,000) in principal amount, issued under and
pursuant to the Constitution and laws of the State of New Mexico,
particularly the Pollution Control Revenue Bond Act, Chapter 397,
Laws of 1973 of the State of New Mexico, 31st Legislature, 1st
Session, as amended (the "Act"), and Ordinance No. 97-1055 of the
City adopted April 17, 1997 by the City Council of the City and
Resolution
No. 97-879 of the City, adopted April 17, 1997 by the City
Council of the City (collectively the "Ordinance"). The Bonds
are being issued to refund certain prior bonds issued by the City
for the benefit of Tucson Electric Power Company a corporation
organized and existing under the laws of the State of Arizona
(the "Company"), for the purpose of defraying the cost to the
Company of the acquisition, construction and installation of
certain air and water pollution control facilities (the
"Facilities") at Units 1 and 2 of the San Juan Generating
Station, an electric power generating plant located within
fifteen miles of the corporate limits of the City but not within
the corporate limits of any municipality, in San Juan County, New
Mexico. Pursuant to an Amended and Restated Installment Sale
Agreement (amending and restating the Original Sale Agreements as
defined in the Ordinance), dated as of April 1, 1997 (the "Sale
Agreement"), between the City and the Company, the prior sale by
the Company to the City of undivided interests in the Facilities
and the prior sale back of such undivided interests in the
Facilities by the City to the Company has been confirmed.
The Bonds are equally and ratably secured, to the extent
provided in the Ordinance, by the pledge thereunder of the
"Receipts and Revenues of the City from the Sale Agreement",
which term is used herein as defined in the Ordinance and which
as therein defined means all moneys paid or payable to the
Trustee for the account of the City by the Company in respect of
the Purchase Price Payments (as such term is defined in the Sale
Agreement), including all receipts of the Trustee which, under
the provisions of the Ordinance, reduce the amounts of such
payments. The City has also pledged and assigned to the Trustee
as security for the Bonds all other rights and interests of the
City under the Sale Agreement (other than its rights to
indemnification and its administrative expenses and certain other
rights).
The transfer of this Bond shall be registered upon the
registration books kept at the principal office of First Trust of
New York, National Association, as Registrar, at the written
request of the registered owner hereof or his attorney duly
authorized in writing, upon surrender of this Bond at said
office, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the registered
owner or his duly authorized attorney.
In the manner and with the effect provided in the Ordinance,
each of the Bonds may be redeemed prior to maturity, as follows:
(a) The Bonds shall be subject to redemption by the
City, at the direction of the Company, on any date on or
after October 1, 2007, in whole at any time or in part from
time to time, at the applicable redemption price (expressed
as a percentage of principal amount) set forth below, plus
accrued interest to the redemption date:
Redemption Period Redemption Price
------------------ ----------------
October 1, 2007 through September 30, 2008 102%
October 1, 2008 through September 30, 2009 101%
October 1, 2009 and thereafter 100%
(b) The Bonds shall be subject to redemption by the
City, at the direction of the Company, in whole at any time
at the principal amount thereof plus accrued interest to the
redemption date, if:
(i) the Company shall have determined that the
continued operation of the Plant (as defined in the
Ordinance) is impracticable, uneconomical or
undesirable for any reason;
(ii) the Company shall have determined that the
continued operation of the Facilities is impracticable,
uneconomical or undesirable due to (A) the imposition
of taxes, other than ad valorem taxes currently levied
upon privately owned property used for the same general
purpose as the Facilities, or other liabilities or
burdens with respect to the Facilities or operation
thereof, (B) changes in technology, in environmental
standards or legal requirements or in the economic
availability of materials, supplies, equipment or labor
or (C) destruction of or damage to all or part of the
Facilities;
(iii) all or substantially all of the Facilities
or the Plant shall have been condemned or taken by
eminent domain; or
(iv) the operation of the Facilities or the Plant
shall have been enjoined or shall have otherwise been
prohibited by, or shall conflict with, any order,
decree, rule or regulation of any court or of any
federal, state or local regulatory body, administrative
agency or other governmental body.
(c) The Bonds shall be subject to mandatory redemption
by the City, at the principal amount thereof plus accrued
interest to the redemption date, on the 180th day (or such
earlier date as may be designated by the Company) after a
final determination by a court of competent jurisdiction or
an administrative agency, to the effect that, as a result of
a failure by the Company to perform or observe any covenant,
agreement or representation contained in the Sale Agreement,
the interest payable on the Bonds is included for Federal
income tax purposes in the gross income of the owners
thereof, other than any owner of a Bond who is a
"substantial user" of the Facilities or a "related person"
within the meaning of Section 103(b)(13) of the Internal
Revenue Code of 1954 (the "1954 Code"). No determination by
any court or administrative agency shall be considered final
for the purposes of this paragraph (c) unless the Company
shall have been given timely notice of the proceeding which
resulted in such determination and an opportunity to
participate in such proceeding, either directly or through
an owner of a Bond, and until the conclusion of any
appellate review sought by any party to such proceeding or
the expiration of the time for seeking such review. The
Bonds shall be redeemed either in whole or in part in such
principal amount that the interest payable on the Bonds
remaining outstanding after such redemption would not be
included in the gross income of any owner thereof, other
than an owner of a Bond who is a "substantial user" of the
Facilities or a "related person" within the meaning of
Section 103(b)(13) of the 1954 Code.
If less than all of the Bonds at the time outstanding are to
be called for redemption, the particular Bonds or portions of
Bonds to be redeemed shall be selected by the Trustee, in such
manner as the Trustee in its discretion may deem proper, in the
principal amounts designated to the Trustee by the Company or
otherwise as required by the Ordinance.
In the event any of the Bonds are called for redemption, the
Trustee shall give notice, in the name of the City, of the
redemption of such Bonds. Such notice shall be given by mailing
a copy of the redemption notice by first-class mail at least
thirty (30) days prior to the date fixed for redemption to the
Registered Owners of the Bonds to be redeemed at the addresses
shown on the registration books; provided, however, that failure
duly to give such notice by mailing, or any defect therein, shall
not affect the validity of any proceedings for the redemption of
the Bonds as to which there shall be no such failure or defect.
With respect to any notice of redemption of Bonds in
accordance with the redemption provisions lettered (a) or (b)
above, unless, upon the giving of such notice, such Bonds shall
be deemed to have been paid within the meaning of the Ordinance,
such notice shall state that such redemption, shall be
conditional upon the receipt, by the Trustee on or prior to the
opening of business on the date fixed for such redemption of
moneys sufficient to pay the principal of and premium, if any,
and interest on such Bonds to be redeemed, and that if such
moneys shall not have been so received said notice shall be of no
force and effect and the City shall not be required to redeem
such Bonds. In the event that such notice of redemption contains
such a condition and such moneys are not so received, the
redemption shall not be made and the Trustee shall within a
reasonable time thereafter give notice, in the manner in which
the notice of redemption was given, that such moneys were not so
received.
If a notice of redemption shall be unconditional, or if the
conditions of a conditional notice of redemption shall have been
satisfied, then upon presentation and surrender of Bonds so
called for redemption at the place or places of payment, such
Bonds shall be redeemed.
Any Bonds and portions of Bonds which have been duly
selected for redemption shall cease to bear interest on the
specified redemption date provided that moneys sufficient to pay
the principal of, premium, if any, and interest on such Bonds
shall be on deposit with the Trustee on the date fixed for
redemption so that such Bonds will be deemed to be paid in
accordance with the Ordinance and such Bonds shall thereafter
cease to be entitled to any lien, benefit or security under the
Ordinance.
The owner of this Bond shall have no right to enforce the
provisions of the Ordinance, or to institute action to enforce
the covenants therein, or to take any action with respect to any
default under the Ordinance, or to institute, appear in or defend
any suit or other proceeding with respect thereto, except as
provided in the Ordinance.
With certain exceptions as provided therein, the Ordinance
and the Sale Agreement may be modified or amended only with the
consent of the owners of a majority in aggregate principal amount
of all Bonds outstanding under the Ordinance which would be
adversely affected thereby.
Reference is hereby made to the Ordinance and the Sale
Agreement, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent
of the rights, duties and obligations of the City, the Company,
the Trustee and the Registered Owners of the Bonds. The
Registered Owner of this Bond, by the acceptance hereof, is
deemed to have agreed and consented to the terms and provisions
of the Ordinance and the Sale Agreement.
Among other things, as provided in the Ordinance and subject
to certain limitations therein set forth, this Bond or any
portion of the principal amount hereof will be deemed to have
been paid within the meaning and with the effect expressed in the
Ordinance, and the entire indebtedness of the City in respect
thereof shall be satisfied and discharged, if there has been
irrevocably deposited with the Trustee, in trust, money in an
amount which will be sufficient and/or Government Obligations (as
defined in the Ordinance), the principal of and interest on
which, when due, without regard to any reinvestment thereof, will
provide moneys which, together with moneys deposited with or held
by the Trustee, will be sufficient, to pay when due the principal
of and premium, if any, and interest on this Bond or such portion
of the principal amount hereof when due.
Among other things, the Sale Agreement contains terms,
provisions and conditions relating to the consolidation or merger
of the Company with or into, and the sale, transfer or other
disposition, of assets to, another Person (as defined in the Sale
Agreement), to the assumption by such Person, in certain
circumstances, of all of the obligations of the Company under the
Sale Agreement and to the release and discharge of the Company,
in certain circumstances, from such obligations.
The City, the Trustee, the Registrar, the Paying Agent and
any co-paying agent may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof for all
purposes, whether or not this Bond is overdue, and neither the
City, the Trustee, the Registrar, the Paying Agent nor any
co-paying agent shall be affected by any notice to the contrary.
It is hereby certified, recited and declared that all acts,
conditions and things required by the Constitution and laws of
the State of New Mexico, the governing rules and procedures of
the City and the Ordinance to exist, to have happened and to have
been performed, precedent to and in the adoption of the Ordinance
and the issuance of this Bond, do exist, have happened and have
been performed in regular and due form as required by law.
No covenant or agreement contained in this Bond or the
Ordinance shall be deemed to be a covenant or agreement of any
official, officer, agent or employee of the City in his
individual capacity, and neither the members of the City Council
of the City, nor any official executing this Bond, shall be
liable personally on this Bond or be subject to any personal
liability or accountability by reason of the issuance or sale of
this Bond.
This Bond shall not be entitled to any right or benefit
under the Ordinance, or be valid or become obligatory for any
purpose, until this Bond shall have been authenticated by the
execution by the Trustee, or its successor as Trustee of the
certificate of authentication inscribed hereon.
IN WITNESS WHEREOF, the City of Farmington, New Mexico, has
caused this Bond to be executed in its name and on its behalf by
its Mayor and Treasurer or Deputy City Treasurer, each by his or
her manual or facsimile signature, and has caused the corporate
seal of the City to be affixed, impressed or reproduced hereon
and attested by the City Clerk with his or her manual or
facsimile signature.
CITY OF FARMINGTON, NEW MEXICO
By___________________________
Mayor
By____________________________
Deputy City Treasurer
(Seal)
ATTEST:
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City Clerk
EXHIBIT B
(FORM FOR ORDINARY REGISTRATION OF TRANSFER)
COMPLETE AND SIGN THIS FORM FOR ORDINARY
REGISTRATION OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security Or Other Identifying Number of
Assignee
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Please print or typewrite name and address including postal zip
code of assignee
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this bond and all rights thereunder, hereby irrevocably
constituting and appointing
attorney to register such
transfer on the registration books in the principal office of the
Registrar, with full power of substitution in the premises.
Dated:___________ -------------------------------------------
NOTE: The signature on this assignment must
correspond with the name as written on the
face of this Bond in every particular,
without alteration, enlargement or any change
whatsoever.
EXHIBIT C
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is one of the Bonds
described in the within-mentioned Ordinance.
First Trust of New York, National Association,
as Trustee
By________________________________________
Authorized Officer
Date of Authentication:____________________