EXHIBIT 4.39 BROKER-DEALER AGREEMENT

EXHIBIT 4.39

 

BROKER-DEALER AGREEMENT

 

among

 

THE BANK OF NEW YORK,

as Auction Agent,

 

CITIGROUP GLOBAL MARKETS INC.,

as Broker-Dealer

 

and

 

EL PASO ELECTRIC COMPANY,

as Borrower

 

Dated as of August 1, 2005

 

relating to

 

$63,500,000

Maricopa County, Arizona Pollution Control Corporation

Pollution Control Refunding Revenue Bonds, 2005 Series B

(El Paso Electric Company Palo Verde Project)

 

and

 

$37,100,000

Maricopa County, Arizona Pollution Control Corporation

Pollution Control Refunding Revenue Bonds, 2005 Series C

(El Paso Electric Company Palo Verde Project)

TABLE OF CONTENTS

 

 

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BROKER-DEALER AGREEMENT

 

This BROKER-DEALER AGREEMENT dated as of August 1, 2005 (the “Agreement”) among THE BANK OF NEW YORK, as auction agent (together with its successors and assigns, the “Auction Agent”), CITIGROUP GLOBAL MARKETS INC. (together with its successor and assigns, hereinafter referred to as “Citigroup”) and El Paso Electric Company (the “Borrower”).

 

WHEREAS, Maricopa County, Arizona Pollution Control Corporation (the “Issuer”) proposes to cause or has caused Union Bank of California, N.A., as trustee (the “Trustee”) to authenticate and deliver $63,500,000 aggregate principal amount of its Pollution Control Refunding Revenue Bonds, 2005 Series B (El Paso Electric Company Palo Verde Project) and $37,100,000 aggregate principal amount of its Pollution Control Refunding Revenue Bonds, 2005 Series C (El Paso Electric Company Palo Verde Project) (collectively, the “Series ARS”) pursuant to separate Indentures of Trust, each dated as of July 1, 2005 (as from time to time in effect, each, a “Trust Indenture” and collectively, the “Trust Indentures”), each between the Issuer and the Trustee.

 

WHEREAS, each Trust Indenture provides that the interest rate with respect to the Series ARS for each Auction Period after the initial ARS Interest Period shall, except under certain conditions, equal the rate per annum that the Auction Agent advises results from implementation of the Auction Procedures (the “Auction Rate”).

 

WHEREAS, Citigroup is an Authorized Broker-Dealer listed in the Auction Agent Agreement, and the Auction Agent is entering into this Agreement pursuant to Section 2.06 of the Auction Agent Agreement.

 

WHEREAS, the Auction Procedures require the participation of one or more Broker-Dealers.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Auction Agent, as agent of the Trustee, and Citigroup agree as follows:

 

Section 1. Definitions and Rules of Construction.

 

1.1 Terms Defined by Reference. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in each Trust Indenture, including applicable Exhibit B thereto, or the Auction Agent Agreement.

 

1.2 Terms Defined Herein. As used herein and in each Appendix hereto, the following terms shall have the following meanings, unless the context otherwise requires:

 

“ARS Beneficial Owner” shall mean the Person who is the beneficial owner of Series ARS according to the records of (i) a Securities Depository while the Series ARS are in book-entry form or (ii) the Trustee while the Series ARS are not in book-entry form.

“Auction” shall have the meaning specified in Section 2.1 hereof.

 

“Auction Agent Agreement” shall mean the Auction Agent Agreement, dated as of August 1, 2005, by and among the Borrower, the Trustee and the Auction Agent relating to the Series ARS.

 

“Auction Procedures” shall mean the provisions that are set forth in Exhibit B of each Trust Indenture.

 

“Authorized Officer” shall mean each Vice President, Assistant Vice President and Assistant Treasurer of the Auction Agent assigned to the Dealing and Trading Group of its Corporate Trust Department and every other officer or employee of the Auction Agent designated as an “Authorized Officer” for purposes of this Agreement in a written communication to Citigroup.

 

“Citigroup Officer” shall mean each officer or employee of Citigroup designated as a “Citigroup Officer” for purposes of this Agreement in a written communication to the Auction Agent.

 

“Notice of Failure to Deliver” shall mean a notice substantially in the form of Exhibit C hereto.

 

“Notice of Transfer” shall mean a notice substantially in the form of Exhibit B hereto.

 

“Order Form” shall mean the form to be submitted by any Broker-Dealer on any Auction Date.

 

“Participant” shall mean, with respect to DTC or another Securities Depository, a member of, or participant in, DTC or such other Securities Depository, respectively.

 

“Settlement Procedures” shall mean the Settlement Procedures attached hereto as Exhibit A.

 

“Submission Processing Deadline” shall mean the earlier of (i) 40 minutes after the Submission Deadline and (ii) the time when the Auction Agent begins to disseminate the results of the Auction to the Broker-Dealers.

 

“Submission Processing Representation” is defined in Series B and Series C Indentures and shall be submitted to the Auction Agent whenever Broker-Dealer implements a Submission Processing Deadline in the form attached hereto as Exhibit D.

 

1.3 Rules of Construction. Unless the context or use indicates another or different meaning or intent, the following rules shall apply to the construction of this Agreement:

 

(a) Words importing the singular number shall include the plural number and vice versa.

 

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The captions and headings herein are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.

 

The words “hereof,” “herein,” “hereto,” and other words of similar import refer to this Agreement as a whole.

 

All references herein to a particular time of day shall be to New York City time.

 

Section 2. The Auction.

 

2.1 Auction Procedures and Settlement Procedures.

 

(a) On each Auction Date, the provisions of the Auction Procedures will be followed by the Auction Agent for the purpose of determining the Applicable ARS Rate for the next Auction Period. Each periodic implementation of such procedures is hereinafter referred to as an “Auction.”

 

(b) All of the provisions contained in the Auction Procedures and the Settlement Procedures are incorporated herein by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions were fully set forth herein.

 

(c) Citigroup agrees to act as, and assumes the obligations of and limitations and restrictions placed upon, a Broker-Dealer under each Trust Indenture and as otherwise set forth in this Agreement.

 

(d) Citigroup and other Broker-Dealers may participate in Auctions for their own accounts. The Auction Agent shall have no duty or liability with respect to monitoring compliance with the provisions of this subsection (d).

 

2.2 Preparation for Each Auction.

 

(a) Not later than 9:30 a.m., New York City time, on each Auction Date for the Series ARS, the Auction Agent shall advise Citigroup by telephone or other electronic communication acceptable to the parties of the All-Hold Rate and the Index used in determining such rate.

 

(b) In the event the Auction Date for any Auction shall be changed after the Auction Agent has given notice of such Auction Date pursuant to clause (vii) of paragraph (a) of the Settlement Procedures, the Auction Agent, by such means as the Auction Agent deems practicable, shall give notice of such change to Citigroup not later than the earlier of 9:15 a.m., New York City time, on the new Auction Date and 9:15 a.m., New York City time, on the old Auction Date. Thereafter, Citigroup shall use its best efforts to promptly notify its customers who are Existing Owners of such change in the Auction Date.

 

(c) The Auction Agent may, but shall have no duty to, request, from time to time, Citigroup to provide it with the number of its customers Citigroup believes are Existing Owners and the aggregate amount held by Citigroup. Citigroup shall comply with any such

 

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request, and the Auction Agent shall keep confidential any such information, including information received as to the identity of Bidders in any Auction, and shall not disclose any such information so provided to any person other than the Trustee, the Issuer, the Borrower and Citigroup, provided that the Auction Agent reserves the right to disclose any such information if (i) it is ordered to do so by a court or regulatory judicial or quasi-judicial agency or authority, or (ii) it is advised by its counsel that its failure to do so would be unlawful or would impose upon it any actual or potential loss, claim, damage, liability, or expense for which it has not received indemnity satisfactory to it.

 

2.3 Auction Schedule. (a) The Auction Agent shall conduct Auctions in accordance with the schedule set forth below. Such schedule may be changed by the Auction Agent with the consent of the Trustee and the Broker-Dealers, which consent shall not be unreasonably withheld or delayed. The Auction Agent shall give notice pursuant to Section 4.3 hereof of any such change to each Broker-Dealer. Such notice shall be given prior to the first Auction Date on which any such change shall be effective. Notwithstanding the foregoing, the Auction Agent will follow the Bond Market Association’s Market Practice Recommendation for shortened trading days for the bond markets (the “BMA Recommendation”) unless the Auction Agent is instructed otherwise. In the event of a BMA Recommendation on an Auction Date, the Submission Deadline shall be 11:30 a.m. instead of 1:00 p.m., and as a result the notices set forth in Section 2.4 hereof will occur earlier.