Exhibit 4c
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LOAN AGREEMENT
(1997 Series B)
between
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE COUNTY OF PIMA
and
TUCSON ELECTRIC POWER COMPANY
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Dated as of September 15, 1997
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Relating To
Industrial Development Revenue Bonds,
1997 Series B
(Tucson Electric Power Company Project)
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TABLE OF CONTENTS*
Page
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LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . 2
SECTION 1.02. Incorporation of Certain Definitions
by Reference . . . . . . . . . . . . 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of
the Authority . . . . . . . . . . . 4
SECTION 2.02. Representations and Warranties of
the Company . . . . . . . . . . . . 5
ARTICLE III
THE FACILITIES
SECTION 3.01. Facilities; Property of the Company . 5
SECTION 3.02. Revision of Plans and Specifications . 5
SECTION 3.03. Maintenance of Facilities; Remodeling 6
SECTION 3.04. Insurance . . . . . . . . . . . . . . 6
SECTION 3.05. Condemnation . . . . . . . . . . . . . 6
SECTION 3.06. Termination of Construction . . . . . 6
ARTICLE IV
ISSUANCE OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS
OF THE BONDS
SECTION 4.01. Issuance of the Bonds . . . . . . . . 6
SECTION 4.02. Issuance of Other Obligations. . . . . 6
SECTION 4.03. The Loan; Disposition of Bond Proceeds 6
SECTION 4.04. Investment of Moneys in Funds and
Accounts . . . . . . . . . . . . . . 7
ARTICLE V
LOAN PAYMENTS; OTHER OBLIGATIONS
SECTION 5.01. Loan Payments. . . . . . . . . . . . . 7
SECTION 5.02. Payments Assigned; Obligation Absolute 7
SECTION 5.03. Payment of Expenses . . . . . . . . . 7
SECTION 5.04. Indemnification . . . . . . . . . . . 7
SECTION 5.05. Payment of Taxes; Discharge of Liens . 8
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.01. Maintenance of Corporate Existence . . 8
SECTION 6.02. Permits or Licenses . . . . . . . . . 9
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* This table of contents is not part of the Loan Agreement, and is
for convenience only. The captions herein are of no legal effect
and do not vary the meaning or legal effect of any part of the
Loan Agreement.
SECTION 6.03. Authority's Access to Facilities . . . 9
SECTION 6.04. Tax-Exempt Status of Interest on Bonds. 9
SECTION 6.05. Use of Facilities . . . . . . . . . . 10
SECTION 6.06. Financing Statements . . . . . . . . . 10
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
SECTION 7.01. Conditions . . . . . . . . . . . . . . 10
SECTION 7.02. Instrument Furnished to the Authority
and Trustee . . . . . . . . . . . . 12
SECTION 7.03. Limitation . . . . . . . . . . . . . . 12
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default . . . . . . . . . . 12
SECTION 8.02. Force Majeure . . . . . . . . . . . . 12
SECTION 8.03. Remedies . . . . . . . . . . . . . . . 13
SECTION 8.04. No Remedy Exclusive . . . . . . . . . 13
SECTION 8.05. Reimbursement of Attorneys' and
Agents' Fees . . . . . . . . . . . . 13
SECTION 8.06. Waiver of Breach . . . . . . . . . . . 13
ARTICLE IX
REDEMPTION OF BONDS
SECTION 9.01. Redemption of Bonds . . . . . . . . . 14
SECTION 9.02. Compliance with the Indenture . . . . 14
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Term of Agreement . . . . . . . . . . 14
SECTION 10.02. Notices . . . . . . . . . . . . . . . 14
SECTION 10.03. Parties in Interest . . . . . . . . . 14
SECTION 10.04. Amendments . . . . . . . . . . . . . 15
SECTION 10.05. Counterparts . . . . . . . . . . . . 15
SECTION 10.06. Severability . . . . . . . . . . . . 15
SECTION 10.07. Governing Law . . . . . . . . . . . . 15
SECTION 10.08. Notice Regarding Cancellation
of Contracts. . . . . . . . . . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exhibit A - Description of the Facilities . . . . . . . . . . A-1
LOAN AGREEMENT
THIS LOAN AGREEMENT (1997 Series B), dated as of September 15,
1997 (this "Agreement"), between THE INDUSTRIAL DEVELOPMENT
AUTHORITY OF THE COUNTY OF PIMA, an Arizona nonprofit corporation
designated by law as a political subdivision of the State of
Arizona (hereinafter called the "Authority"), and TUCSON ELECTRIC
POWER COMPANY, a corporation organized and existing under the
laws of the State of Arizona (hereinafter called the "Company"),
W I T N E S S E T H :
WHEREAS, the Authority is authorized and empowered under Title
35, Chapter 5, Arizona Revised Statutes, as amended (the "Act"),
to issue its bonds in accordance with the Act and to make secured
or unsecured loans for the purpose of financing or refinancing
the acquisition, construction, improvement or equipping of
projects consisting of land, any building or other improvement,
and all real and personal properties, including but not limited
to machinery and equipment, whether or not now in existence or
under construction, whether located within or without Pima
County, which shall be suitable for, among other things,
facilities for the furnishing of electric energy, gas or water,
air and water pollution control facilities and sewage and solid
waste disposal facilities, and to charge and collect interest on
such loans and pledge the proceeds of loan agreements as security
for the payment of the principal of and interest on bonds, or
designated issues of bonds, issued by the Authority and any
agreements made in connection therewith, whenever the Board of
Directors of the Authority finds such loans to be in furtherance
of the purposes of the Authority or in the public interest;
WHEREAS, the Authority has heretofore issued and sold
$75,000,000 aggregate principal amount of its Industrial
Development Revenue Bonds, 1982 Series A (Tucson Electric Power
Company General Project), all of which remain outstanding (the
"1982 Bonds due June 15, 2022"), the proceeds of which were
loaned to the Company to finance and refinance a portion of the
costs of the acquisition, construction, improvement and equipping
of certain of the facilities for furnishing electric energy
described in Exhibit A hereto ("Facilities");
WHEREAS, the Authority has also heretofore issued and sold
$75,000,000 aggregate principal amount of its Industrial
Development Revenue Bonds, 1982 Series A (Tucson Electric Power
Company General Project), all of which remain outstanding (the
"1982 Bonds due July 1, 2022", and, together with the 1982 Bonds
due June 15, 2022, hereinafter collectively referred to as the
"1982 Bonds"), the proceeds of which were loaned to the Company
to finance and refinance certain additional costs of the
Facilities; and
WHEREAS, the Authority proposes to issue and sell its revenue
bonds for the purpose of refinancing, by the payment or
redemption of the 1982 Bonds, or provisions therefor, the portion
of the costs of the Facilities previously financed and/or
refinanced from the proceeds of the 1982 Bonds;
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby and in consideration of the premises, DO HEREBY
AGREE as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Article
I shall for all purposes of this Agreement have the meanings
herein specified, unless the context clearly requires otherwise:
Act:
"Act" shall mean Title 35, Chapter 5, Arizona Revised
Statutes, and all acts supplemental thereto or amendatory
thereof.
Administration Expenses:
"Administration Expenses" shall mean the reasonable expenses
incurred by the Authority with respect to this Agreement, the
Indenture and any transaction or event contemplated by this
Agreement or the Indenture, including the compensation and
reimbursement of expenses and advances payable to the Trustee, to
the paying agent, any co-paying agent and the registrar under the
Indenture and a pro rata share of the Authority's annual
operating expenses in accordance with the provisions of paragraph
XII.D. of the Authority's Procedural Pamphlet.
Agreement:
"Agreement" shall mean this Loan Agreement, dated as of
September 15, 1997, between the Authority and the Company, and
any and all modifications, alterations, amendments and
supplements hereto.
Authority:
"Authority" shall mean The Industrial Development Authority of
the County of Pima, an Arizona nonprofit corporation designated
by law as a political subdivision of the State of Arizona
incorporated for and with the approval of Pima County, Arizona,
pursuant to the provisions of the Constitution of the State of
Arizona and the Act, its successors and their assigns.
Authorized Company Representative:
"Authorized Company Representative" shall mean each person at
the time designated to act on behalf of the Company by written
certificate furnished to the Authority and the Trustee containing
the specimen signature of such person and signed on behalf of the
Company by its President, any Vice President or its Treasurer,
together with its Secretary or any Assistant Secretary.
Bond Counsel:
"Bond Counsel" shall mean any firm or firms of nationally
recognized bond counsel experienced in matters pertaining to the
validity of, and exclusion from gross income for federal tax
purposes of interest on bonds issued by states and political
subdivisions, selected by the Company and acceptable to the
Authority.
Bond Fund:
"Bond Fund" shall mean the fund created by Section 4.01 of the
Indenture.
Bonds:
"Bond" or "Bonds" shall mean the Industrial Development
Revenue Bonds, 1997 Series B (Tucson Electric Power Company
Project) of the Authority.
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 the proceeds thereof, unless the context
clearly requires otherwise. Reference 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 7.01 to
the extent of the obligations assumed thereunder.
Completion Date:
"Completion Date" shall be the date on which the Facilities
are completed in their entirety and ready to be placed in service
and operated, all as determined by the Company.
Facilities:
"Facilities" shall mean the real and personal properties,
machinery and equipment currently existing, under construction
and to be constructed which are described in Exhibit A hereto, as
revised from time to time to reflect any changes therein,
additions thereto, substitutions therefor and deletions therefrom
permitted by the terms hereof, subject, however, to the
provisions of Section 7.01 hereof.
Indenture:
"Indenture" shall mean the Indenture of Trust, dated as of
September 15, 1997, between the Authority and the Trustee
relating to the Bonds, and any and all modifications,
alterations, amendments and supplements thereto.
Loan Payments:
"Loan Payments" shall mean the payments required to be made by
the Company pursuant to Section 5.01 hereof.
1954 Code:
"1954 Code" shall mean the Internal Revenue Code of 1954, as
amended.
1982 Bonds:
"1982 Bonds" shall mean the $75,000,000 aggregate principal
amount of the Authority's Industrial Development Revenue Bonds,
1982 Series A (Tucson Electric Power Company General Project) due
June 15, 2022 and $75,000,000 aggregate principal amount of the
Authority's Industrial Development Revenue Bonds, 1982 Series A
(Tucson Electric Power Company General Project) due July 1, 2022.
Outstanding:
"Outstanding", when used in reference to the Bonds, shall
mean, as at any particular date, the aggregate of all Bonds
authenticated and delivered under the Indenture except:
(a) those canceled by the Trustee at or prior to such date
or delivered to or acquired by the Trustee at or prior to such
date for cancellation;
(b) those deemed to be paid in accordance with Article VIII
of the Indenture; and
(c) those in lieu of or in exchange or substitution for
which other Bonds shall have been authenticated and delivered
pursuant to the Indenture, unless proof satisfactory to the
Trustee and the Company is presented that such Bonds are held
by a bona fide holder in due course.
Person:
"Person" means (i) any corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
business trust, or unincorporated organization, in each case
formed or organized under the laws of the United States of
America, any state thereof or the District of Columbia, or (ii)
the United States of America or any state thereof, or any
political subdivision of either thereof, or any agency, authority
or other instrumentality of any of the foregoing.
Tax Agreement:
"Tax Agreement" shall mean that tax certificate and agreement,
dated the date of the initial authentication and delivery of the
Bonds, between the Authority and the Company, relating to the
requirements of the Code, and any and all modifications,
alterations, amendments and supplements thereto.
Trustee:
"Trustee" shall mean First Trust of New York, National
Association, as trustee under the Indenture, its successors in
trust and their assigns.
SECTION 1.02. Incorporation of Certain Definitions by
Reference. Each capitalized term used herein and not otherwise
defined herein shall have the meaning set forth in the Indenture.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties of the
Authority. The Authority makes the following representations and
warranties as the basis for the undertakings on the part of the
Company contained herein:
(a) The Authority is an Arizona nonprofit corporation
designated by law as a political subdivision of the State of
Arizona created and existing under the Constitution and laws
of the State of Arizona;
(b) The Authority has the power to enter into this
Agreement and the Indenture and to perform and observe the
agreements and covenants on its part contained herein and
therein, including without limitation the power to issue and
sell the Bonds as contemplated herein and in the Indenture,
and by proper action has duly authorized the execution and
delivery hereof and thereof; and
(c) The execution and delivery of this Agreement and the
Indenture by the Authority do not, and consummation of the
transactions contemplated hereby and fulfillment of the terms
hereof and thereof by the Authority will not, result in a
breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Authority is now a party
or by which it is now bound, or, to the best knowledge of the
Authority, any order, rule or regulation applicable to the
Authority of any court or of any regulatory body or
administrative agency or other governmental body having
jurisdiction over the Authority or over any of its properties,
or the Constitution or laws of the State of Arizona.
SECTION 2.02. Representations and Warranties of the Company.
The Company makes the following representations and warranties as
the basis for the undertakings on the part of the Authority
contained herein:
(a) The Company is a corporation duly organized and
existing in good standing under the laws of the State of
Arizona and duly qualified as a foreign corporation in the
State of New Mexico;
(b) The Company has power to enter into this Agreement and
to perform and observe the agreements and covenants on its
part contained herein and by proper corporate action has duly
authorized the execution and delivery hereof and all other
documents hereby executed by the Company;
(c) The execution and delivery of this Agreement by the
Company do not, and consummation of transactions contemplated
hereby and fulfillment of the terms hereof by the Company will
not, result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company
is a party or by which it is now bound, or the Restated
Articles of Incorporation or by-laws of the Company, or any
order, rule or regulation applicable to the Company of any
court or of any regulatory body or administrative agency or
other governmental body having jurisdiction over the Company
or over any of its properties, or any statute of any
jurisdiction applicable to the Company;
(d) The Arizona Corporation Commission has approved all
matters relating to the Company's participation in the
transactions contemplated by this Agreement which require said
approval, and no other consent, approval, authorization or
other order of any regulatory body or administrative agency or
other governmental body is legally required for the Company's
participation therein, except such as may have been obtained
or may be required under the securities laws of any
jurisdiction;
(e) The Facilities are to be used solely for purposes
contemplated by the Act and are located or are to be located
within the State of Arizona; and
(f) All of the proceeds of the Bonds (exclusive of accrued
interest, if any, paid by the initial purchasers of such Bonds
upon delivery thereof) will be expended to refinance the
Facilities through the payment or redemption of the 1982
Bonds, or provisions therefor.
ARTICLE III
THE FACILITIES
SECTION 3.01. Facilities; Property of the Company. An
undivided interest in the Facilities shall be the property of the
Company and the Authority shall have no right, title or interest
in the Facilities.
SECTION 3.02. Revision of Plans and Specifications. The
Company may consent to one or more revisions to the plans and
specifications for the Facilities (including without limitation
any changes therein, additions thereto, substitutions therefor
and deletions therefrom), at any time and from time to time prior
to the Completion Date in any respect; provided, however, that,
if any such revision shall render inaccurate the description of
the Facilities contained in Exhibit A hereto, the Company shall
deliver to the Authority and the Trustee (a) a revised Exhibit A
containing a description of the Facilities as revised, the
accuracy of which shall have been certified by an Authorized
Company Representative, and (b) an opinion of Bond Counsel to the
effect that the Facilities as described in the revised Exhibit A
are such that the expenditure of the proceeds of the Bonds
pursuant to this Agreement will not, in and of itself, impair the
validity of the Bonds under the Act or the exclusion from gross
income for federal tax purposes of interest on the Bonds. A
revision of Exhibit A hereto pursuant to this Section 3.02 shall
not constitute an amendment, change or modification of this
Agreement within the meaning of Article XII of the Indenture.
SECTION 3.03. Maintenance of Facilities; Remodeling. The
Company shall at all times cause the Facilities, and every
element and unit thereof, to be maintained, preserved and kept in
thorough repair, working order and condition and cause all
needful and proper repairs and renewals thereto to be made;
provided, however, that the Company may cause the operation of
the Facilities, or any element or unit thereof, to be
discontinued if, in the judgment of the Company, it is no longer
advisable to operate the same, or if the Company intends to sell
or dispose of the same and within a reasonable time shall
endeavor to effectuate such sale or disposition.
After the Completion Date, the Company may, subject to the
provisions of Section 6.05 hereof, at its own expense remodel the
Facilities or make such substitutions, modifications and
improvements to the Facilities from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes,
which remodeling, substitutions, modifications and improvements
shall be included under the terms of this Agreement as part of
the Facilities.
SECTION 3.04. Insurance. The Company shall keep the
Facilities insured against fire and other risks to the extent
usually insured against by companies owning and operating similar
property, by reputable insurance companies or, at the Company's
election, with respect to all or any element or unit of the
Facilities, by means of an adequate insurance fund set aside and
maintained by it out of its own earnings or in conjunction with
other companies through an insurance fund, trust or other
agreement or, by means of unfunded self-insurance as may be
reasonable and customary by companies owning and operating
similar property. All proceeds of such insurance shall be for
the account of the Company.
SECTION 3.05. Condemnation. The Company shall be entitled to
the entire proceeds of any condemnation award or portion thereof
made for damages to or takings of the Facilities or other
property of the Company.
SECTION 3.06. Termination of Construction. Anything in this
Agreement to the contrary notwithstanding, the Company shall have
the right at any time to terminate the construction of the
Facilities, in whole, if the Company shall have determined that
the continued construction or operation of the Facilities, in
whole, is impracticable, uneconomical or undesirable for any
reason.
ARTICLE IV
ISSUANCE OF THE BONDS; THE LOANS; DISPOSITION OF PROCEEDS
OF THE BONDS
SECTION 4.01. Issuance of the Bonds. The Authority shall
issue the Bonds under and in accordance with the Indenture,
subject to the provisions of the bond purchase agreement among
the Authority, the initial purchaser or purchasers of the Bonds
and the Company. The Company hereby approves the issuance of the
Bonds and all terms and conditions thereof.
SECTION 4.02. Issuance of Other Obligations. The Authority
and the Company expressly reserve the right to enter into, to the
extent permitted by law, but shall not be obligated to enter
into, an agreement or agreements other than this Agreement with
respect to the issuance by the Authority, under an indenture or
indentures other than the Indenture, of obligations to provide
additional funds to pay the cost of construction of the
Facilities or obligations to refund all or any principal amount
of the Bonds, or any combination thereof.
SECTION 4.03. The Loan; Disposition of Bond Proceeds. The
Authority and the Company shall enter into escrow arrangements
with the trustee for the 1982 Bonds and shall cause the proceeds
of the Bonds, other than accrued interest, if any, paid by the
initial purchaser or purchasers thereof, to be deposited in
escrow with such trustee to be applied to the payment of the 1982
Bonds upon the redemption thereof.
The Authority shall establish the Bond Fund with the Trustee
in accordance with Section 4.01 of the Indenture.
SECTION 4.04. Investment of Moneys in Funds and Accounts.
The Company and the Authority agree that any moneys held in any
fund or account created by the Indenture shall be invested as
provided in the Indenture.
ARTICLE V
LOAN PAYMENTS; OTHER OBLIGATIONS
SECTION 5.01. Loan Payments. In consideration of the
issuance of the Bonds and the disposition of the proceeds thereof
as contemplated in Section 4.03 hereof, the Company shall pay, or
cause to be paid, to the Trustee for the account of the Authority
an amount equal to the aggregate principal amount of the Bonds
from time to time Outstanding and, as interest on its obligation
to pay such amount, an amount equal to premium, if any, and
interest on such Bonds, such amounts to be paid in installments
due on the dates, in the amounts and in the manner provided in
the Indenture for the Authority to cause amounts to be deposited
in the Bond Fund for the payment of the principal of and premium,
if any, and interest on the Bonds whether at stated maturity,
upon redemption or acceleration or otherwise; provided, however,
that the obligation of the Company to make any such payment
hereunder shall be reduced by the amount of any reduction under
the Indenture of the amount of the corresponding payment required
to be made by the Authority thereunder.
SECTION 5.02. Payments Assigned; Obligation Absolute. It is
understood and agreed that all Loan Payments are, by the
Indenture, to be pledged by the Authority to the Trustee, and
that all rights and interest of the Authority hereunder (except
for the Authority's rights under Sections 5.03, 5.04, 6.03 and
8.05 hereof and any rights of the Authority to receive notices,
certificates, requests, requisitions and other communications
hereunder) are to be pledged and assigned to the Trustee. The
Company assents to such pledge and assignment and agrees that the
obligation of the Company to make the Loan Payments shall be
absolute, irrevocable and unconditional and shall not be subject
to cancellation, termination or abatement, or to any defense
other than payment or to any right of set-off, counterclaim or
recoupment arising out of any breach by the Authority or the
Trustee or any other party under this Agreement, the Indenture or
otherwise, or out of any obligation or liability at any time
owing to the Company by the Authority, the Trustee or any other
party, and, further, that the Loan Payments and the other
payments due hereunder shall continue to be payable at the times
and in the amounts herein and therein specified, whether or not
the Facilities, or any portion thereof, shall have been completed
or shall have been destroyed by fire or other casualty, or title
thereto, or the use thereof, shall have been taken by the
exercise of the power of eminent domain, and that there shall be
no abatement of or diminution in any such payments by reason
thereof, whether or not the Facilities shall be used or useful,
whether or not any applicable laws, regulations or standards
shall prevent or prohibit the use of the Facilities, or for any
other reason, all of the foregoing being subject, however, to the
provisions of Sections 6.01 and 7.01 hereof.
SECTION 5.03. Payment of Expenses. The Company shall pay all
Administration Expenses, including, without limitation,
Administration Expenses incurred at and subsequent to the time
the Bonds are deemed to have been paid in accordance with Article
VIII of the Indenture. The payment of the compensation and the
reimbursement of expenses and advances of the Trustee, of the
paying agent, any co-paying agent and the registrar under the
Indenture shall be made directly to such entities.
SECTION 5.04. Indemnification. The Company releases the
Authority, the Trustee and their directors, officers, employees
and agents from, agrees that the Authority and the Trustee shall
not be liable for, and agrees to indemnify and hold the
Authority, the Trustee and their directors, officers, employees
and agents free and harmless from, any liability (including,
without limitation, attorneys' and other agents' fees and
expenses) for any loss or damage to property or any injury to or
death of any person that may be occasioned by any cause
whatsoever pertaining to the Facilities, except (i) in the case
of the Trustee, as a result of the negligence or bad faith or
willful misconduct of the Trustee or its directors, officers,
employees and agents; and (ii) in the case of the Authority, as a
result of gross negligence or bad faith of the Authority or its
directors, officers, employees and agents.
The Company will indemnify and hold the Authority and the
Trustee, free and harmless from any loss, claim, damage, tax,
penalty, liability, disbursement, litigation expenses, attorneys'
and other agents' fees and expenses or court costs arising out
of, or in any way relating to, the execution or performance of
this Agreement, the issuance or sale of the Bonds, actions taken
under the Indenture or any other cause whatsoever pertaining to
the Facilities, except (i) in the case the Trustee, as a result
of the negligence or bad faith or willful misconduct of the
Trustee; and (ii) in the case of the Authority, as a result of
the gross negligence or bad faith of the Authority.
The Company will indemnify and hold the Authority and its
directors, officers, employees and agents free and harmless from
any loss, claim, damage, tax, penalty, liability, disbursement,
litigation expenses, attorney's fees and expenses or court costs
arising out of or in any way relating to any untrue statement or
alleged untrue statement of any material fact or omission or
alleged omission to state a material fact necessary to make the
statements made, in light of the circumstances under which they
were made, not misleading in any official statement or other
offering material utilized in connection with the sale of any
Bonds.
SECTION 5.05. Payment of Taxes; Discharge of Liens. The
Company shall: (a) pay, or make provision for payment of, all
lawful taxes and assessments, including income, profits, property
or excise taxes, if any, or other municipal or governmental
charges, levied or assessed by any federal, state or municipal
government or political body upon the Facilities or any part
thereof or upon the Authority with respect to the Loan Payments,
when the same shall become due; and (b) pay or cause to be
satisfied and discharged or make adequate provision to satisfy
and discharge, within sixty (60) days after the same shall
accrue, any lien or charge upon the Loan Payments, and all lawful
claims or demands for labor, materials, supplies or other charges
which, if unpaid, might be or become a lien upon such amounts;
provided, that, if the Company shall first notify the Authority
and the Trustee of its intention so to do, the Company may in
good faith contest any such lien or charge or claims or demands
in appropriate legal proceedings, and in such event may permit
the items so contested and identified as such by the Company to
remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom, unless the Trustee shall notify
the Company in writing that, in the opinion of counsel to the
Trustee, based upon material facts disclosed to the Trustee
without any duty of investigation, by nonpayment of any such
items the lien of the Indenture as to the Loan Payments will be
materially endangered, in which event the Company shall promptly
pay and cause to be satisfied and discharged all such unpaid
items. The Authority shall cooperate fully with the Company in
any such contest.
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.01. Maintenance of Corporate Existence. Except as
permitted in this Section 6.01, the Company shall maintain its
corporate existence, shall not sell, transfer or otherwise
dispose of all of its assets, as or substantially as an entirety,
and shall not consolidate with or merge with or into another
corporation. The Company may consolidate with or merge into
another corporation incorporated under the laws of the United
States of America, any state thereof or the District of Columbia,
or sell, transfer or otherwise dispose of all of its assets, as
or substantially as an entirety, to any Person, if the surviving
or resulting corporation (if other than the Company) or the
transferee Person, as the case may be, prior to or simultaneously
with such merger, consolidation, sale, transfer or disposition,
assumes, by delivery to the Trustee and the Authority of an
instrument in writing satisfactory in form to the Trustee, all
the obligations of the Company under this Agreement, including,
without limitation, the obligations of the Company under Section
5.01 hereof. Upon such an assumption following any such sale,
transfer or other disposition of assets, the Company shall be
released and discharged from all liability in respect of all
obligations under this Agreement. Notwithstanding the foregoing,
in the case of any such sale, transfer or other disposition of
assets, which do not include the Facilities, the Company shall
remain liable in respect of all obligations under this Agreement
other than the obligations under Section 5.01 hereof, and the
transferee shall not be required to assume any obligations
hereunder other than the obligations under Section 5.01 hereof;
provided, however, that the transferee shall be required to
assume all such other obligations unless the Company shall have
delivered to the Authority and the Trustee an opinion of Bond
Counsel to the effect that the non-assumption by the transferee
of such other obligations will not impair the validity under the
Act of the Bonds and will not adversely affect the exclusion from
gross income for federal tax purposes of interest on the Bonds.
If consolidation, merger or sale, transfer or other
disposition is made as permitted by this Section 6.01, the
provisions of this Section 6.01 shall continue in full force and
effect and no further consolidation, merger or sale or other
transfer shall be made except in compliance with the provisions
of this Section 6.01.
Anything in this Agreement to the contrary notwithstanding,
the sale, transfer or other disposition by the Company of all of
its facilities (a) for the generation of electric energy, (b) for
the transmission of electric energy or (c) for the distribution
of electric energy, in each case considered alone, or all of its
facilities described in clauses (a) and (b), considered together,
or all of its facilities described in clauses (b) and (c),
considered together, shall in no event be deemed to constitute a
sale, transfer or other disposition of all the properties of the
Company, as or substantially as an entirety, unless, immediately
following such sale, transfer or other disposition, the Company
shall own no properties in the other such categories of property
not so sold, transferred or otherwise disposed of. The character
of particular facilities shall be determined by reference to the
Uniform System of Accounts prescribed for public utilities and
licensees subject to the Federal Power Act, as amended, to the
extent applicable.
SECTION 6.02. Permits or Licenses. In the event that it may
be necessary for the proper performance of this Agreement on the
part of the Company or the Authority that any application or
applications for any permit or license to do or to perform
certain things be made to any governmental or other agency by the
Company or the Authority, the Company and the Authority each
shall, upon the request of either, execute such application or
applications.
SECTION 6.03. Authority's Access to Facilities. The
Authority shall have the right, upon appropriate prior notice to
the Company, to have reasonable access to the Facilities during
normal business hours for the purpose of making examinations and
inspections of the same.
SECTION 6.04. Tax-Exempt Status of Interest on Bonds. (a) It
is the intention of the parties hereto that interest on the Bonds
shall be and remain tax-exempt, and to that end the covenants and
agreements of the Authority and the Company in this Section 6.04
and the Tax Agreement are for the benefit of the Owners from time
to time of the Bonds.
(b) Each of the Company and the Authority covenants and
agrees for the benefit of the Owners from time to time of the
Bonds that it will not directly or indirectly use or permit
the use of (to the extent within its control) the proceeds of
any of the Bonds or any other funds, or take or omit to take
any action, if and to the extent such use, or the taking or
omission to take such action, would cause any of the Bonds to
be "arbitrage bonds" within the meaning of Section 148 of the
Code or otherwise subject to federal income taxation by reason
of Section 103 and 141 through 150 of the Code or Section 103
of the 1954 Code and Title XIII of the Tax Reform Act of 1986,
as applicable, and any applicable regulations promulgated
thereunder. To such ends, the Authority and the Company will
comply with all requirements of such Section 148 to the extent
applicable to the Bonds. In the event that at any time the
Authority or the Company is of the opinion that for purposes
of this Section 6.04(b) it is necessary to restrict or limit
the yield on the investment of any moneys held by the Trustee
under the Indenture, the Authority or the Company shall so
notify the Trustee in writing.
Without limiting the generality of the foregoing, the
Company and the Authority agree that there shall be paid from
time to time all amounts required to be rebated to the United
States of America pursuant to Section 148(f) of the Code and
any applicable Treasury Regulations. This covenant shall
survive payment in full or defeasance of the Bonds and the
satisfaction and discharge of the Indenture. The Company
specifically covenants to pay or cause to be paid the Rebate
Requirement as defined and described in the Tax Agreement.
(c) The Authority certifies and represents that it has not
taken, and the Authority covenants and agrees that it will not
take, any action which results in interest paid on the Bonds
being included in gross income of the Owners of the Bonds for
federal tax purposes pursuant to Sections 103 and 141 of the
Code or to Section 103 of the 1954 Code and Title XIII of the
Tax Reform Act of 1986, as applicable, and any regulations
thereunder; and the Company certifies and represents that it
has not taken or (to the extent within its control) permitted
to be taken, and the Company covenants and agrees that it will
not take or (to the extent within its control) permit to be
taken any action which will cause the interest on the Bonds to
become includable in gross income for federal income tax
purposes; provided, however, that neither the Company nor the
Authority shall be deemed to have violated these covenants if
the interest on any of the Bonds becomes taxable to a person
solely because such person is a "substantial user" of the
Facilities or a "related person" within the meaning of Section
103(b)(13) of the 1954 Code and provided, further, that none
of the covenants and agreements herein contained shall require
either the Company or the Authority to enter an appearance or
intervene in any administrative, legislative or judicial
proceeding in connection with any changes in applicable laws,
rules or regulations or in connection with any decisions of
any court or administrative agency or other governmental body
affecting the taxation of interest on the Bonds. The Company
acknowledges having read Section 7.08 of the Indenture and
agrees to perform all duties imposed on it by such Section
7.08, by this Section and by the Tax Agreement. Insofar as
Section 7.08 of the Indenture and the Tax Agreement impose
duties and responsibilities on the Company, they are
specifically incorporated herein by reference.
(d) Notwithstanding any provision of this Section 6.04 and
Section 7.08 of the Indenture, if the Company shall provide to
the Authority and the Trustee an opinion of Bond Counsel to
the effect that any specified action required under this
Section 6.04 and Section 7.08 of the Indenture is no longer
required or that some further or different action is required
to maintain the tax-exempt status of interest on the Bonds,
the Company, the Trustee and the Authority may conclusively
rely upon such opinion in complying with the requirements of
this Section 6.04, and the covenants hereunder shall be deemed
to be modified to that extent.
SECTION 6.05. Use of Facilities. So long as any Bonds are
Outstanding and the Facilities are operated by or for the benefit
of the Company, the Company shall cause the Facilities to be used
for purposes contemplated by the Act and in the Tax Agreement.
SECTION 6.06. Financing Statements. The Company shall file
and record, or cause to be filed and recorded, all financing
statements and continuation statements referred to in Section
7.07 of the Indenture.
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
SECTION 7.01. Conditions. The Company's interest in this
Agreement may be assigned as a whole or in part, and its interest
in the Facilities may be leased, sold, transferred or otherwise
disposed of by the Company as a whole or in part (whether an
interest in a specific element or unit or an undivided interest),
to any Person; provided, however, that no such assignment, lease,
sale, transfer or other disposition (a) shall relieve the Company
from its primary liability for its obligations under Section 5.01
hereof or (b) shall be made unless the assignee, lessee,
purchaser or other transferee, as the case may be, prior to or
simultaneously with such assignment, lease, sale, transfer or
other disposition, assumes, by delivery of an instrument in
writing satisfactory in form to the Trustee and the Authority,
all other obligations of the Company hereunder to the extent of
the interest assigned, leased, sold, transferred or otherwise
disposed of, and the Company shall be released of and discharged
from such obligations to the extent so assumed. Notwithstanding
the foregoing, (a) if (i) the Company's interest in this
Agreement shall be assigned as a whole or in undivided part, (ii)
the Company's interest in the Facilities shall be leased as a
whole or in undivided part and the term of such leasehold or the
term of any extension or extensions thereof at the option of the
Company shall extend beyond the maturity date of the Bonds or
(iii) the Company's interest in the Facilities shall be sold,
transferred or otherwise disposed of as a whole or in undivided
part, and (b) in the event that the assignee, lessee, purchaser
or other transferee shall assume the obligations of the Company
under Section 5.01 hereof for the remaining term of this
Agreement, to the extent of such assignment, lease, sale,
transfer or other disposition, the Company shall be released from
and discharged of all liability in respect of such obligations to
the extent so assumed (but only to such extent); provided,
however, that the release and discharge of the Company pursuant
to clause (b) shall be conditioned upon the delivery by the
Company to the Authority and the Trustee of a certificate of an
Independent Expert (as hereinafter defined) describing the
interests so assigned, leased, sold, transferred or otherwise
disposed of, together with all other rights, interests, assets
and/or properties assigned, leased, sold, transferred or
otherwise disposed of by the Company to the same Person in the
same or a related transaction, stating that such rights,
interests, assets and/or properties so described constitute
facilities for the generation, transmission and/or distribution
of electric energy and stating that, in the opinion of such
Independent Expert, the Fair Value (as hereinafter defined) of
such rights, interests, assets and/or properties to the Person
acquiring the same is not less than an amount equal to 10/7 of
the sum of (x) the aggregate principal amount of the Bonds then
Outstanding and (y) the outstanding principal amount of all other
obligations of the Company representing indebtedness for borrowed
money or for the deferred purchase price of property which are
being assumed by such Person; provided, further, that after any
such assumption, release and discharge as aforesaid, the Company
may again assume such obligations under Section 5.01 hereof, in
whole or in part, at any time and from time to time, and, to the
extent of any such assumption by the Company (but only to such
extent), the aforesaid assignee, lessee, purchaser or other
transferee shall be released from and discharged of all liability
in respect of such obligations.
Anything herein to the contrary notwithstanding, the Company
shall not make any assignment, lease or sale as provided in the
immediately preceding paragraph unless it shall have furnished to
the Authority and the Trustee an opinion of Bond Counsel to the
effect that the proposed assignment, lease or sale will not
impair the validity under the Act of the Bonds and will not
adversely affect the exclusion of interest on the Bonds from
gross income for federal tax purposes.
After any lease, sale, transfer or other disposition of any
element or unit of the Facilities, or any interest therein, the
Company may, at its option, cause such element or unit, or
interest therein, to no longer be deemed to be part of the
Facilities for the purposes of this Agreement by delivering to
the Authority and the Trustee the agreements or other documents
required pursuant to Section 7.02 hereof together with an
instrument signed by an Authorized Company Representative stating
that such element or unit, or interest therein, shall no longer
be deemed to be part of the Facilities for the purposes of this
Agreement.
For purposes of this Section 7.01:
(a) "Independent Expert" means a Person which (i) is an
engineer, appraiser or other expert and which, with respect to
any certificate to be delivered pursuant to this Section, is
qualified to pass upon the matter set forth in such
certificate and (ii)(A) is in fact independent, (B) does not
have any direct material financial interest in the transferee
or in any obligor upon the Bonds or under this Agreement or in
any affiliate of the transferee or any such obligor, (C) is
not connected with the transferee or any such obligor as an
officer, employee, promoter, underwriter, trustee, partner,
director or any person performing similar functions and (D) is
approved by the Trustee in the exercise of reasonable care;
for purposes of this definition "engineer" means a Person
engaged in the engineering profession or otherwise qualified
to pass upon engineering matters (including, but not limited
to, a Person licensed as a professional engineer, whether or
not then engaged in the engineering profession); and for
purposes of this definition "appraiser" means a Person engaged
in the business of appraising property or otherwise qualified
to pass upon the Fair Value or fair market value of property.
(b) "Fair Value" means the fair value of the interests,
rights, assets and/or properties assigned, leased, sold,
transferred or otherwise disposed of (but, in the case of a
lease, only to the extent of such lease) as may be determined
by reference to (i) except in the case of a lease, the amount
which would be likely to be obtained in an arm's-length
transaction with respect to such interests, rights, assets
and/or properties between an informed and willing buyer and an
informed and willing seller, under no compulsion,
respectively, to buy or sell, (ii) in the case of a lease, the
amount (discounted to present value at a rate not lower than
the taxable equivalent of the yield to maturity of the Bonds
based on prevailing market prices immediately prior to the
first public announcement of the proposed transaction) which
would be likely to be obtained in an arm's-length transaction
with respect to such interests, rights, assets and/or
properties between an informed and willing lessee and an
informed and willing lessor, neither under any compulsion to
lease; (iii) the amount of investment with respect to such
interests, rights, assets and/or properties which, together
with a reasonable return thereon, would be likely to be
recovered through ordinary business operations or otherwise,
(iv) the cost, accumulated depreciation and replacement cost
with respect to such interests, rights, assets and/or
properties and/or (v) any other relevant factors; provided,
however, that (x) Fair Value shall be determined without
deduction for any mortgage, deed of trust, pledge, security
interest, encumbrance, lease, reservation, restriction,
servitude, charge or similar right or any other lien of any
kind and (y) the Fair Value to the transferee of any property
shall not reflect any reduction relating to the fact that such
property may be of less value to a Person which is not the
owner, lessee or operator of the property or any portion
thereof than to a Person which is such owner, lessee or
operator. Fair Value may be determined, without physical
inspection, by the use of accounting and engineering records
and other data maintained by the Company or the transferee or
otherwise available to the Independent Expert certifying the
same.
SECTION 7.02. Instrument Furnished to the Authority and
Trustee. The Company shall, within fifteen (15) days after the
delivery thereof, furnish to the Authority and the Trustee a true
and complete copy of the agreements or other documents
effectuating any such assignment, lease, sale, transfer or other
disposition.
SECTION 7.03. Limitation. This Agreement shall not be
assigned nor shall the Facilities be leased, sold, transferred or
otherwise disposed of, in whole or in part, except as provided in
this Article VII or in Section 6.01 or 5.02 hereof. This Article
VII shall not apply to any sale, transfer or other disposition by
the Company of all of its assets, as or substantially as an
entirety, as contemplated in Section 6.01.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default. Each of the following
events shall constitute and is referred to in this Agreement as
an "Event of Default":
(a) a failure by the Company to make any Loan Payment,
which failure shall have resulted in an "Event of Default"
under clause (a) or (b) of Section 9.01 of the Indenture;
(b) a failure by the Company to pay when due any amount
required to be paid under this Agreement or to observe and
perform any covenant, condition or agreement on its part to be
observed or performed (other than a failure described in
clause (a) above), which failure shall continue for a period
of sixty (60) days after written notice, specifying such
failure and requesting that it be remedied, shall have been
given to the Company by the Authority or the Trustee, unless
the Authority and the Trustee shall agree in writing to an
extension of such period prior to its expiration; provided,
however, that the Authority and the Trustee shall be deemed to
have agreed to an extension of such period if corrective
action is initiated by the Company within such period and is
being diligently pursued; or
(c) the dissolution or liquidation of the Company, or
failure by the Company promptly to lift any execution,
garnishment or attachment of such consequence as will impair
its ability to make any payments under this Agreement, or the
entry of an order for relief by a court of competent
jurisdiction in any proceeding for its liquidation or
reorganization under the provisions of any bankruptcy act or
under any similar act which may be hereafter enacted, or an
assignment by the Company for the benefit of its creditors, or
the entry by the Company into an agreement of composition with
its creditors (the term "dissolution or liquidation of the
Company," as used in this clause, shall not be construed to
include the cessation of the corporate existence of the
Company resulting either from a merger or consolidation of the
Company into or with another corporation or a dissolution or
liquidation of the Company following a transfer of all or
substantially all its assets as an entirety, under the
conditions permitting such actions contained in Section 6.01
hereof).
SECTION 8.02. Force Majeure. The provisions of Section 8.01
hereof are subject to the following limitations: if by reason of
acts of God; strikes, lockouts or other industrial disturbances;
acts of public enemies; orders of any kind of the government of
the United States or of the State of Arizona, or any department,
agency, political subdivision, court or official of any of them,
or any civil or military authority; insurrections; riots;
epidemics; landslides; lightning; earthquakes; volcanoes; fires;
hurricanes; tornadoes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances;
explosions; breakage or accident to machinery; partial or entire
failure of utilities; or any cause or event not reasonably within
the control of the Company, the Company is unable in whole or in
part to carry out any one or more of its agreements or
obligations contained herein, other than its obligations under
Sections 5.01, 5.03, 5.05, and 6.01 hereof, the Company shall not
be deemed in default by reason of not carrying out said agreement
or agreements or performing said obligation or obligations during
the continuance of such inability. The Company shall make
reasonable effort to remedy with all reasonable dispatch the
cause or causes preventing it from carrying out its agreements;
provided, that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion
of the Company, and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances
by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the
Company.
SECTION 8.03. Remedies. (a) Upon the occurrence and
continuance of any Event of Default described in clause (a) of
Section 8.01 hereof, and further upon the condition that, in
accordance with the terms of the Indenture, the Bonds shall have
been declared to be immediately due and payable pursuant to any
provision of the Indenture, the Loan Payments shall, without
further action, become and be immediately due and payable.
Any waiver of any "Event of Default" under the Indenture and a
rescission and annulment of its consequences shall constitute a
waiver of the corresponding Event or Events of Default under this
Agreement and a rescission and annulment of the consequences
thereof.
(b) Upon the occurrence and continuance of any Event of
Default, the Authority, or the Trustee with respect to the rights
of the Authority assigned to the Trustee by the Indenture, may
take any action at law or in equity to collect any payments then
due and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of the
Company hereunder.
(c) Any amounts collected by the Trustee from the Company
pursuant to this Section 8.03 shall be applied in accordance with
the Indenture.
SECTION 8.04. No Remedy Exclusive. No remedy conferred upon
or reserved to the Authority hereby is intended to be exclusive
of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law
or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the
Authority to exercise any remedy reserved to it in this Article
VIII, it shall not be necessary to give any notice, other than
such notice as may be herein expressly required.
SECTION 8.05. Reimbursement of Attorneys' and Agents' Fees.
If the Company shall default under any of the provisions hereof
and the Authority or the Trustee shall employ attorneys or agents
or incur other reasonable expenses for the collection of payments
due hereunder or for the enforcement of performance or observance
of any obligation or agreement on the part of the Company
contained herein, the Company will on demand therefor reimburse
the Authority or the Trustee and any predecessor Trustee, as the
case may be, for the reasonable fees of such attorneys and such
other reasonable expenses so incurred.
SECTION 8.06. Waiver of Breach. In the event any obligation
created hereby shall be breached by either of the parties and
such breach shall thereafter be waived by the other party, such
waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder. In view
of the assignment of certain of the Authority's rights and
interest hereunder to the Trustee, the Authority shall have no
power to waive any breach hereunder by the Company in respect of
such rights and interest without the consent of the Trustee, and
the Trustee may exercise any of such rights of the Authority
hereunder.
ARTICLE IX
REDEMPTION OF BONDS
SECTION 9.01. Redemption of Bonds. The Authority shall take,
or cause to be taken, the actions required by the Indenture to
discharge the lien created thereby through the redemption, or
provision for payment or redemption, of all Bonds then
Outstanding, or to effect the redemption, or provision for
payment or redemption, of less than all the Bonds then
Outstanding, upon receipt by the Authority and the Trustee from
the Company of a notice designating the principal amount of the
Bonds to be redeemed, or for the payment or redemption of which
provision is to be made, and, in the case of redemption of Bonds,
or provision therefor, specifying the date of redemption and the
applicable redemption provision of the Indenture. Such
redemption date shall not be less than 45 days from the date such
notice is given (unless a shorter notice is satisfactory to the
Trustee). Unless otherwise stated therein, such notice shall be
revocable by the Company at any time prior to the time at which
the Bonds to be redeemed, or for the payment or redemption of
which provision is to be made, are first deemed to be paid in
accordance with Article VIII of the Indenture. The Company shall
furnish any moneys or Government Obligations (as defined in the
Indenture) required by the Indenture to be deposited with the
Trustee or otherwise paid by the Authority in connection with any
of the foregoing purposes.
SECTION 9.02. Compliance with the Indenture. Anything in
this Agreement to the contrary notwithstanding, the Authority and
the Company shall take all actions required by this Agreement and
the Indenture in order to comply with any provisions of the
Indenture requiring the mandatory redemption of Bonds.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Term of Agreement. This Agreement shall
remain in full force and effect from the date hereof until the
right, title and interest of the Trustee in and to the Trust
Estate (as defined in the Indenture) shall have ceased,
terminated and become void in accordance with Article VIII of the
Indenture and until all payments required under this Agreement
shall have been made. Notwithstanding the foregoing, the
covenants contained in Section 5.03, 5.04, Section 6.04 and 8.05
hereof shall survive the termination of this Agreement.
SECTION 10.02. Notices. Except as otherwise provided in this
Agreement, all notices, certificates, requests, requisitions and
other communications hereunder shall be in writing and shall be
sufficiently given and shall be deemed given when mailed by
registered mail, postage prepaid, addressed as follows: if to the
Authority, c/o Russo, Cox & Russo, P.C., 1820 East River Road,
Suite 230, Tucson, Arizona 85718; if to the Company, at 220 West
Sixth Street, Tucson, Arizona 85702, Attention: Treasurer; and
if to the Trustee, at such address as shall be designated by it
in the Indenture. A copy of each notice, certificate, request or
other communication given hereunder to the Authority, the
Company, or the Trustee shall also be given to the others. The
Authority, the Company, and the Trustee may, by notice given
hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other
communications shall be sent.
SECTION 10.03. Parties in Interest. This Agreement shall
inure to the benefit of and shall be binding upon the Authority,
the Company and their respective successors and assigns, and no
other person, firm or corporation shall have any right, remedy or
claim under or by reason of this Agreement; provided, however,
that the rights and remedies granted to the Authority in Article
VIII hereof, shall inure to the benefit of the Trustee, on behalf
of the Owners from time to time of the Bonds, and shall be
enforceable by the Trustee as a third party beneficiary or as
assignee of the Authority; and provided, further, that neither
Pima County, Arizona nor the State of Arizona shall in any event
be liable for the payment of the principal of or premium, if any,
or interest on the Bonds or for the performance of any pledge,
mortgage, obligation or agreement created by or arising out of
this Agreement or the issuance of the Bonds, and further that
neither the Bonds nor any such obligation or agreement of the
Authority shall be construed to constitute an indebtedness of
Pima County, Arizona or the State of Arizona within the meaning
of any constitutional or statutory provisions whatsoever, but
shall be limited obligations of the Authority payable solely out
of the revenues derived from this Agreement, or from the sale of
the Bonds, or from the investment or reinvestment of any of the
foregoing, as provided herein and in the Indenture.
SECTION 10.04. Amendments. This Agreement may be amended
only by written agreement of the parties hereto, subject to the
limitations set forth herein and in the Indenture.
SECTION 10.05. Counterparts. This Agreement may be executed
in any number of counterparts, each of which, when so executed
and delivered, shall be an original; but such counterparts shall
together constitute but one and the same Agreement.
SECTION 10.06. Severability. If any clause, provision or
section of this Agreement shall, for any reason, be held illegal
or invalid by any court, the illegality or invalidity of such
clause, provision or section shall not affect any of the
remaining clauses, provisions or sections hereof, and this
Agreement shall be construed and enforced as if such illegal or
invalid clause, provision or section had not been contained
herein. In case any agreement or obligation contained in this
Agreement be held to be in violation of law, then such agreement
or obligation shall be deemed to be the agreement or obligation
of the Authority or the Company, as the case may be, to the full
extent permitted by law.
SECTION 10.07. Governing Law. The laws of the State of
Arizona shall govern the construction and enforcement of this
Agreement, except that the provisions of Section 13.09 of the
Indenture, construed as provided in Section 13.07 of the
Indenture, shall apply to this Agreement as if contained herein.
SECTION 10.08. Notice Regarding Cancellation of Contracts.
As required by the provisions of Section 38-511, Arizona Revised
Statutes, as amended, notice is hereby given that political
subdivisions of the State of Arizona or any of their departments
or agencies may, within three (3) years of its execution, cancel
any contract, without penalty or further obligation, made by the
political subdivisions or any of their departments or agencies on
or after September 30, 1988, if any person significantly involved
in initiating, negotiating, securing, drafting or creating the
contract on behalf of the political subdivisions or any of their
departments or agencies is, at any time while the contract or any
extension of the contract is in effect, an employee or agent of
any other party to the contract in any capacity or a consultant
to any other party of the contract with respect to the subject
matter of the contract. The cancellation shall be effective when
written notice from the chief executive officer or governing body
of the political subdivision is received by all other parties to
the contract unless the notice specifies a later time.
The Company covenants and agrees not to employ as an employee,
agent or, with respect to the subject matter of this Agreement, a
consultant, any person significantly involved in initiating,
negotiating, securing, drafting or creating such Agreement on
behalf of the Authority within three (3) years from the execution
hereof, unless a waiver is provided by the Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed as of the day and year first above
written.
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE COUNTY OF PIMA
By: /s/ Stanley Lehman
--------------------------
President
TUCSON ELECTRIC POWER COMPANY
By: /s/ Kevin Larson
--------------------------
Vice President
EXHIBIT A
A portion of the costs of the construction, improvement or
equipping of the following Facilities will be refinanced with the
proceeds of the Industrial Development Revenue Bonds, 1997 Series
B (Tucson Electric Power Company Project) issued by The
Industrial Development Authority of the County of Pima and
referred to in the foregoing Loan Agreement.
--------------------
Certain additions and improvements to the Company's low-
voltage transmission and distribution facilities in the City of
Tucson and environs in Pima County and to Fort Huachuca in
adjacent Cochise County, Arizona and additions and improvements
to the Irvington Generating Station located in the City of
Tucson, more particularly described in the Tax Certificate and
Agreement, dated as of October 1, 1997, between The Industrial
Development Authority of the County of Pima and Tucson Electric
Power Company.