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EXHIBIT 4(c)
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SUPPLEMENT NO. 1 TO THE
AMENDED AND RESTATED PARTICIPATION AGREEMENT
AMONG
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
(FORMERLY THE CONNECTICUT NATIONAL BANK)
OWNER TRUSTEE
THE FIRST NATIONAL BANK OF CHICAGO,
ORIGINAL INDENTURE TRUSTEE
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
INDENTURE TRUSTEE
HNB INVESTMENT CORP.
(AS TRANSFEREE FROM PHILIP MORRIS CREDIT CORPORATION),
OWNER PARTICIPANT
MESQUITE POWER CORPORATION,
SELLER
AND
TEXAS UTILITIES ELECTRIC COMPANY,
LESSEE
___________________
DATED AS OF OCTOBER 19, 1995
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TABLE OF CONTENTS
Page
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Obligations of the Owner Trustee in Respect of
1995 Series Bonds. . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Conditions Precedent to Obligations of the Owner Participant,
Lessee, the Owner Trustee and the Indenture Trustee on the
Refunding Date . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7. Supplement. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8. Instructions of the Owner Participant. . . . . . . . . . . . . 5
Section 9. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 10. Lease Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 5
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
APPENDIX A - Definitions
Schedule 1 - Assumptions
Annex A to Schedule 1 - Basic Rent
Annex B to Schedule 1 - Casualty Values
Annex C to Schedule 1 - Bond Amortization Schedules
EXHIBIT A - Lease Agreement Supplement No. 2
EXHIBIT B - Indenture Supplement No. 1
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SUPPLEMENT NO. 1 TO THE PARTICIPATION AGREEMENT
THIS SUPPLEMENT NO. 1, dated as of October 19, 1995 to the
AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of November 28, 1989, as
supplemented (the "Participation Agreement"), among SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION (FORMERLY THE CONNECTICUT NATIONAL BANK), a national
banking association, not in its individual capacity except to the extent set
forth herein but as trustee ("Owner Trustee"), AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, a national banking association, as indenture trustee,
("Indenture Trustee"), THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as original indenture trustee, HNB INVESTMENT CORP., a Delaware
corporation (as Transferee from Philip Morris Credit Corporation)("Owner
Participant"), MESQUITE POWER CORPORATION, a Texas Corporation, as Seller and
TEXAS UTILITIES ELECTRIC COMPANY, a Texas corporation ("TU Electric" or
"Lessee").
RECITALS:
A. The Participation Agreement provides, among other things,
that the Owner Trustee will issue and sell Refunding Bonds for the purpose of
refunding the Initial Series Bonds (such term and the other capitalized terms
used herein without definition having the respective meanings specified in
Appendix A hereto).
C. The parties to the Participation Agreement wish to amend
and supplement in certain respects the Participation Agreement for the purpose,
among others, of providing for the refunding of the Initial Series Bonds, and
to set forth more fully their agreement with respect to the subject matter
hereof.
D. On September 21, 1995, pursuant to a letter of instruction
dated such date from the Owner Participant to the Owner Trustee, the Owner
Trustee (i) exercised its option to redeem on October 25, 1995 all of the
$81,595,000 principal amount of Initial Series Bonds with a Stated Maturity of
January 1, 2018 and (ii) gave notice of such optional redemption to the
Indenture Trustee pursuant to Section 6.03 of the Indenture. On September 22,
1995, pursuant to Section 6.05 of the Indenture, the Indenture Trustee gave
notice to each Holder of Initial
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Series Bonds of a Stated Maturity of January 1, 2018 of such optional
redemption.
Accordingly, in consideration of the premises and of other
good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Amendments. (a) Appendix A. Appendix A to the
Participation Agreement is hereby amended to read, in its entirety, as set
forth in Appendix A attached hereto.
(b) Schedule 1. Pursuant to Section 18(b) of the
Participation Agreement, Schedule 1 to the Participation Agreement is hereby
amended to read, in its entirety, as set forth in Schedule 1 hereto. The
parties hereto agree to enter into a further supplement to the Participation
Agreement, if necessary, to record any changes in the assumptions set forth in
Schedule 1 attached hereto as a result of an adjustment pursuant to Section 4.5
of the Lease if the assumptions set forth in Schedule 1 attached hereto at the
time of the pricing of the refinancing contemplated hereby shall thereafter
prove to be incorrect at the time of the closing of such refinancing.
(c) Amendments to Certain Operative Documents. As
contemplated by (1) Section 18(b) of the Participation Agreement, (2) in the
case of item (ii) below, Section 2.15 of the Indenture, and (3) in the case of
item (i) below, Sections 4.5 and 4.11 of the Lease, subject nevertheless to the
satisfaction or waiver of the conditions set forth in such Sections 18(b), 2.15
and 4.11 and Section 3 hereof, on or before the Refunding Date (i) the Owner
Trustee and Lessee shall execute and deliver Lease Agreement Supplement No. 2
(which shall be substantially in the form of Exhibit A hereto, the "Lease
Supplement") and the Owner Trustee and Lessee hereby request and instruct the
Indenture Trustee to consent to the Lease Supplement and the Owner Participant
and the Indenture Trustee shall consent to the Lease Supplement, and (ii) the
Owner Trustee, the Indenture Trustee and Lessee shall execute and deliver Trust
Indenture, Security Agreement and Mortgage Supplement No. 1, which shall be
substantially in the form of Exhibit B hereto, with such changes as the parties
hereto shall agree (the "Indenture Supplement").
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Section 2. Obligations of the Owner Trustee in Respect of
1995 Series Bonds. Subject to the terms and conditions of this Supplement No.
1 and in reliance on the representations and warranties of the other parties
hereto contained herein or made pursuant hereto, the Owner Trustee at the
direction of the Owner Participant, and at the request hereof of Lessee, on the
Refunding Date shall execute, and shall request the Indenture Trustee to
authenticate and deliver, the 1995 Series Bonds, in the aggregate principal
amount of $81,595,000. The proceeds of the sale of the 1995 Series Bonds shall
be deposited in immediately available funds with the Indenture Trustee for
prepayment of the Initial Series Bonds of a Stated Maturity of January 1, 2018
on the Refunding Date.
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Section 3. Conditions Precedent to Obligations of the Owner
Participant, Lessee, the Owner Trustee and the Indenture Trustee on the
Refunding Date. The obligations of the Owner Participant, Lessee, the Owner
Trustee and the Indenture Trustee to participate in the transactions
contemplated hereunder shall be subject to the fulfillment to the satisfaction
of, or waiver by, the Owner Participant, Lessee, the Owner Trustee and the
Indenture Trustee (acting directly or by authorization to its counsel but in no
event in the capacity as a fiduciary for any party to any Operative Document or
any holder of a 1995 Series Bond) (i) prior to or on the Refunding Date, of all
of the conditions precedent set forth in Section 18 the Participation
Agreement, as heretofore amended, and (ii) of the following conditions:
(a) On the Refunding Date, the following statements shall be true
and the Owner Participant, Lessee, the Owner Trustee and the
Indenture Trustee shall have received
(i) an Officers' Certificate of Lessee, dated the
Refunding Date, stating that (A) the
representations and warranties of Lessee
contained in Section 9.1 of the Participation
Agreement (except subsection 9.1.6 and except
that, with respect to subsection 9.1.7, TU
Electric has leased the Sites to Lessor
pursuant to the Ground Leases) are true and
accurate on and as of the Refunding Date as
though made on and as of the Refunding Date
except (I) to the extent that such
representations and warranties relate solely
to an earlier date (in which case such
representations and warranties shall have
been true and accurate on and as of such
earlier date), (II) any reference to "Funding
Date" in subsections 9.1.4, 9.1.10 and 9.1.11
shall be deemed to be a reference to the
Refunding Date; and (III) any references in
subsections 9.1.9 and 9.1.10 to "Lessee's
Annual Report on Form 10-K" shall be deemed
to be a reference to Lessee's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1994, and any references to
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"Lessee's Quarterly Report on Form 10-Q"
shall be deemed to be a reference to Lessee's
Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1995 and June 30,
1995; (B) no event or condition has occurred
and is continuing, or would result from the
consummation of any transaction contemplated
by the Operative Documents to which it is a
party, which constitutes a Lease Default or
Lease Event of Default, and no Event of Loss
has occurred; and (C) each of the Operative
Documents to which it is a party remains in
full force and effect with respect to it,
except as such enforceability may be limited
by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar
laws affecting the enforcement of creditor's
rights generally and by general principles of
equity; and
(ii) an Officer's Certificate of each of the Owner
Participant, the Owner Trustee and the
Indenture Trustee, each in its respective
individual capacity, which Officers'
Certificates shall be dated the Refunding
Date, stating that (A) the respective
representations and warranties of the Owner
Trustee, the Owner Participant (except
subsection 5.1.6) and the Indenture Trustee
contained in Sections 6.l, 5.l and 8.1,
respectively, of the Participation Agreement
are true and accurate on and as of the
Refunding Date as though made on and as of
the Refunding Date except to the extent that
such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties shall have
been true and accurate on and as of such
earlier date) and (B) each Operative Document
to which it is a party remains in full force
and effect with respect to it, except as such
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,
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moratorium or other similar laws affecting
the enforcement of creditor's rights
generally and by general principles of
equity.
(b) Each of the parties hereto (other than the Person represented
by the following counsel) shall have received opinions of the
Owner Participant's in-house counsel, Worsham, Forsythe &
Wooldridge, L.L.P., Lessee's general counsel, Reid & Priest
LLP, Lessee's special counsel, Shipman & Goodwin, the Owner
Trustee's counsel, and the Indenture Trustee's in-house
counsel, each dated the Refunding Date, addressed to such
Persons and each in form and substance satisfactory to the
recipients thereof.
(c) The Lease Supplement and the Indenture Supplement shall have
each been validly executed and delivered.
Section 4. Waiver. By their execution hereof, the parties
hereto waive any notice requirement contained in Section 18(c) of the
Participation Agreement.
Section 5. Amendments. Neither this Supplement No. 1 nor the
Participation Agreement nor any of the terms hereof or thereof may be approved,
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which enforcement of such
change is sought.
Section 6. Counterparts. This Supplement No. 1 may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of such counterparts shall
together constitute but one and the same instrument.
Section 7. Supplement. This Supplement No. 1 shall be
construed a supplemental to the Participation Agreement and shall form a part
thereof and the Participation Agreement is hereby incorporated by reference
herein and each is hereby ratified, approved and confirmed.
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Section 8. Instructions of the Owner Participant. In
accordance with the Trust Agreement, the Owner Participant hereby authorizes
and directs the Owner Trustee to execute and deliver this Supplement No. 1, the
Lease Supplement, the Indenture Supplement, and the Series 1995 Bonds, and any
letters, certificates or other writings contemplated by any of such documents.
Section 9. Governing Law. THIS SUPPLEMENT NO. 1 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 10. (a) Lease Indemnity. Lessee agrees, without
limitation as to time, to assume liability for, and to indemnify, defend,
protect, save and hold harmless (to the fullest extent permitted by law) Owner
Participant and Owner Trustee, and the officers, directors, agents and
employees of each of them and each Person who controls each of them (within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act) (each an "Indemnified Party"), on an after-tax basis from and
against, any and all Claims of or against Owner Participant or Owner Trustee,
whether or not Owner Participant and Owner Trustee shall also be indemnified as
to any such Claim by any other Person, in any way relating to or arising in
connection with the offer or sale of the 1995 Series Bonds under the Securities
Act, or any other applicable law relating to the offering and sale of the 1995
Series Bonds including, without limitation, all Claims arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus or form of prospectus, or arising out of or
based upon, in the case of the registration statement, any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading and, in the case of any prospectus or
form of prospectus, any omission therein or alleged omission of material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
except, in either case: (i) to the extent that the same arise out of or are
based upon information furnished in writing to Lessee by such Indemnified Party
expressly for use therein or otherwise in connection with the offer and sale of
the 1995 Series Bonds; and (ii) any Claim resulting solely from breach by Owner
Participant or Owner
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Trustee (which, in the case of Owner Trustee, shall have resulted from its
gross negligence or willful misconduct) of any of its representations,
warranties or covenants contained in any document or Certificate delivered by
the Owner Trustee or Owner Participant in connection with the issuance of the
1995 Series Bonds in any material respect. When an Indemnified Party has
received indemnification payments from Lessee in full satisfaction of the
indemnification provisions of this Supplement No. 1, Lessee shall be
subrogated, to the extent of such indemnity paid, to such Indemnified Party's
rights with respect to the transaction or event requiring or giving rise to
such indemnity, other than such rights against such Indemnified Party to the
extent they are indemnified hereunder. Nothing contained herein shall be
construed as a guaranty of (A) payment of any of the Bonds; or (B) the Useful
Life of the Facilities; or (C) the value of the Leased Assets upon termination
of the Basic Term or any Renewal Term.
(b) Conduct of Indemnification Proceedings. If any
Indemnified Party shall be entitled to indemnity hereunder, such Indemnified
Party shall give prompt notice to Lessee of the commencement of any proceeding
with respect to which such Indemnified Party seeks indemnification or
contribution pursuant to hereto; provided, however, that the failure so to
notify Lessee shall not relieve Lessee from any obligation or liability except
to the extent that Lessee has been prejudiced by such failure. Lessee shall
have the right, exercisable by giving written notice to such Indemnified Party
promptly after the receipt of written notice from such Indemnified Party of
such proceeding, to assume, at the Lessee's expense, the defense of any such
proceedings, with counsel reasonably satisfactory to such Indemnified Party;
provided, however, that an Indemnified Party or Parties (if more than one such
Indemnified Party is named in any proceeding) shall have the right to employ
separate counsel in any such proceedings and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or Parties unless: (1) Lessee agrees in writing to pay
such fees and expenses; or (2) Lessee fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
Indemnified Party or Parties; or (3) the defendants in such proceeding shall
include both Lessee and the Indemnified Party or Parties and the Indemnified
Party or Parties shall have been
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advised by counsel in its reasonable judgement that there is reasonably likely
to be a conflict between the positions of Lessee or an Affiliate of Lessee and
such Indemnified Party or Parties in conducting the defense of such action or
proceeding or that there are reasonably likely to be legal defenses available
to such Indemnified Party or Parties different from or in addition to those
available to the Lessee or such Affiliate; or (4) the indemnified Party or
Parties shall have been advised by counsel that there exists a risk of criminal
liability to such Indemnified Party or Parties, in which case, if such
Indemnified Party or Parties notifies Lessee in writing that it elects to
employ separate counsel at the expense of Lessee, Lessee shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
and must be reasonably satisfactory to Lessee, it being understood, however,
that, unless there exists a conflict among Indemnified Parties, Lessee shall
not, in connection with any one such proceeding or separate but substantially
similar or related proceedings, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for
such Indemnified Party or Parities, or for fees and expenses that are not
reasonable. Whether or not such defense is assumed by Lessee, Lessee or
Indemnified Party or Parties will not be subject to any liability for any
settlement made without its or their consent (but such consent will not be
unreasonably withheld). Lessee shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, Lessee agrees subject to the exception and
limitations set forth above, to indemnify and hold harmless each Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment. Lessee shall not consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party or Parties of a
release, in form and substance satisfactory to the Indemnified Party or
Parties, from all liability in respect of such proceeding for which such
Indemnified Party would be entitled to indemnification hereunder (whether or
not any Indemnified Party is a party thereto).
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(c) Contribution. If the indemnification provided for in
this Section 10 is unavailable to an Indemnified Party or is insufficient to
hold such Indemnified Party harmless for any Claims in respect of which this
would otherwise apply by its terms, then Lessee, in lieu of indemnifying such
Indemnified Party, to the fullest extent lawful shall have a joint and several
obligation to contribute to the amount paid or payable by such Indemnified
Party as a result of such Claims, in such proportion as is appropriate to
reflect the relative fault of Lessee, on the one hand, and such Indemnified
Party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Claims as well as any other relevant equitable
considerations. The relative fault of Lessee, on the one hand, and such
Indemnified Party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been taken by, or relates to information supplied
by, Lessee or such Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a
result of any Claims shall be deemed to include any legal or other fees or
expenses incurred by such party in connection with any proceeding, to the
extent such party would have been indemnified for such expenses if the
indemnification provided for in Section 10(a) or 10(b) was available to such
party.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 10(c) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The indemnity, contribution and expense reimbursement
obligations under this Section 10(c) shall be in addition to any liability
Lessee may otherwise have; provided that any excess payment made by Lessee
shall be refunded to Lessee by the Indemnified Party receiving such excess
payment.
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IN WITNESS WHEREOF, the parties hereto have each caused this
Supplement No. 1 to be duly executed as of the date first above written.
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity except to the
extent expressly provided herein but as Owner
Trustee pursuant to the Trust Agreement
By: /s/Steven Cimalore
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Name: Steven Cimalore
Title: Vice President
AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, not in its individual capacity except
to the extent expressly provided herein
but as Indenture Trustee pursuant to
the Indenture
By: /s/Patricia B. Martirano
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Name: Patricia B. Martirano
Title: Second Vice President
HNB INVESTMENT CORP.,
Owner Participant
By: /s/Fran J. Vedder
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Name: Fran J. Vedder
Title: Director, NY Finance
TEXAS UTILITIES ELECTRIC COMPANY,
Lessee
By: /s/H. Dan Farell
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H. Dan Farell
Senior Vice President
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SCHEDULE 1
[ASSUMPTIONS]
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ANNEX A TO SCHEDULE 1
[BASIC RENT]
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ANNEX B TO SCHEDULE 1
[CASUALTY VALUES]
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ANNEX C TO SCHEDULE 1
[BOND AMORTIZATION SCHEDULE]
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EXHIBIT A
[LEASE AGREEMENT SUPPLEMENT NO. 2]
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EXHIBIT B
[INDENTURE SUPPLEMENT NO. 1]