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LOAN AGREEMENT
between
INDIANA DEVELOPMENT FINANCE AUTHORITY
and
PSI ENERGY, INC.
-------------------------------
$23,000,000
Indiana Development Finance Authority
Environmental Refunding
Revenue Bonds, Series 1998
(PSI Energy, Inc. Project)
-------------------------------
Dated
as of
July 15, 1998
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................... 2
Section 1.1. Use of Defined Terms.................................. 2
Section 1.2. Definitions........................................... 2
Section 1.3. Interpretation........................................ 7
Section 1.4. Captions and Headings................................. 7
ARTICLE II REPRESENTATIONS....................................... 8
Section 2.1. Representations of the Issuer......................... 8
Section 2.2. No Warranty by Issuer of Condition or Suitability of
the Project 8
Section 2.3. Representations and Covenants of the Company.......... 8
ARTICLE III COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS..... 12
Section 3.1. Acquisition, Construction and Installation........... 12
Section 3.2. Project Description.................................. 12
Section 3.3. Issuance of the Bonds; Application of Proceeds....... 12
Section 3.4. Investment of Fund Moneys............................ 13
Section 3.5. Rebate Fund.......................................... 13
ARTICLE IV LOAN BY ISSUER; LOAN PAYMENTS; ADDITIONAL PAYMENTS;
AND CREDIT FACILITY................................ 15
Section 4.1. Loan Repayment....................................... 15
Section 4.2. Additional Payments.................................. 15
Section 4.3. Place of Payments.................................... 16
Section 4.4. Obligations Unconditional............................ 16
Section 4.5. Assignment of Revenues and Agreement................. 16
Section 4.6. Credit Facility; Alternate Credit Facility;
Cancellation....................................... 16
Section 4.7. Company's Option to Elect Rate Period................ 17
Section 4.8. Company's Obligation to Purchase Bonds............... 17
ARTICLE V ADDITIONAL AGREEMENTS AND COVENANTS.................. 18
Section 5.1. Right of Inspection.................................. 18
Section 5.2. Maintenance.......................................... 18
Section 5.3. Removal of Portions of the Project Facilities........ 18
Section 5.4. Operation of Project Facilities...................... 18
Section 5.5. Insurance............................................ 19
Section 5.6. Workers' Compensation Coverage....................... 19
Section 5.7. Damage; Destruction and Eminent Domain............... 19
Section 5.8. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted........ 19
Section 5.9. Indemnification...................................... 20
Section 5.10. Company Not to Adversely Affect Exclusion of
Interest on Bonds From Gross Income For Federal
Income Tax Purposes................................ 21
Section 5.11. Use of Project Facilities............................ 21
Section 5.12. Assignment by Company................................ 21
ARTICLE VI REDEMPTION........................................... 23
Section 6.1. Optional Redemption.................................. 23
Section 6.2. Extraordinary Optional Redemption.................... 23
Section 6.3. Mandatory Redemption................................. 25
Section 6.4. Notice of Redemption................................. 25
Section 6.5. Actions by Issuer.................................... 25
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES....................... 26
Section 7.1. Events of Default.................................... 26
Section 7.2. Remedies on Default.................................. 27
Section 7.3. No Remedy Exclusive.................................. 28
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses........ 28
Section 7.5. No Waiver............................................ 28
Section 7.6. Notice of Default.................................... 28
ARTICLE VIII MISCELLANEOUS........................................ 29
Section 8.1. Term of Agreement.................................... 29
Section 8.2. Amounts Remaining in Funds........................... 29
Section 8.3. Notices.............................................. 29
Section 8.4. Extent of Covenants of the Issuer; No Personal
Liability.......................................... 29
Section 8.5. Binding Effect....................................... 30
Section 8.6. Amendments and Supplements........................... 30
Section 8.7. References to Credit Facility........................ 30
Section 8.8. Execution Counterparts............................... 30
Section 8.9. Severability......................................... 30
Section 8.10. Governing Law........................................ 30
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of July 15, 1998
between the INDIANA DEVELOPMENT FINANCE AUTHORITY (the "Issuer"), a separate
body corporate and politic organized and existing under the laws of the State of
Indiana, and PSI ENERGY, INC. (the "Company"), a public utility and corporation
duly organized and validly existing under the laws of the State of Indiana.
Capitalized terms used in the following recitals are used as defined in Article
I of this Agreement.
Pursuant to Indiana Code, Title 4, Article 4, Chapters 10.9 and 11
(collectively, the "Act"), the Issuer has determined to issue, sell and deliver
the Bonds, and to lend the proceeds derived from the sale thereof to the Company
to assist in the refunding of the Refunded Bonds as defined below. The Refunded
Bonds were issued to provide funds to make a loan to the Company to assist in
the financing of its portion of the costs of the Project as defined below.
The Company and the Issuer each have full right and lawful authority to
enter into this Agreement and to perform and observe the provisions hereof on
their respective parts to be performed and observed.
NOW THEREFORE, in consideration of the premises and the mutual
representations and agreements hereinafter contained, the Issuer and the Company
agree as follows (provided that any obligation of the Issuer or the State
created by or arising out of this Agreement shall never constitute a general
debt of the Issuer or the State or give rise to any pecuniary liability of the
Issuer or the State but shall be payable solely out of Revenues, including the
Loan Payments made pursuant hereto and moneys drawn under any Credit Facility):
ARTICLE I
DEFINITIONS
Section I.1. Use of Defined Terms. In addition to the words and terms
defined elsewhere in this Agreement or by reference to another document, the
words and terms set forth in Section 1.2 hereof shall have the meanings set
forth therein unless the context or use clearly indicates another meaning or
intent. Such definitions shall be equally applicable to both the singular and
plural forms of any of the words and terms defined therein.
Section I.2. Definitions. As used herein:
"Act" means, collectively, Indiana Code, Title 4, Article 4, Chapters 10.9
and 11.
"Additional Payments" means the amounts required to be paid by the Company
pursuant to the provisions of Section 4.2 hereof.
"Administration Expenses" means the compensation (which compensation shall
not be greater than that typically charged in similar circumstances) and
reimbursement of reasonable expenses and advances payable to the Trustee, the
Registrar, the Remarketing Agent, any Paying Agent and any Authenticating Agent.
"Agreement" means this Loan Agreement, as amended or supplemented from time
to time.
"Alternate Credit Facility" means an Alternate Credit Facility as defined
in the Indenture.
"Authenticating Agent" means the Authenticating Agent as defined in the
Indenture.
"Bank" means the Bank as defined in the Indenture.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Purchase Fund" means the Bond Purchase Fund as defined in the
Indenture.
"Bond Resolution" means the resolution of the Issuer providing for the
issuance of the Bonds and approving this Agreement, the Indenture and related
matters, as amended or supplemented from time to time.
"Bond Service Charges" means, for any period or time, the principal of,
premium, if any, and interest due on the Bonds for that period or payable at
that time whether due at maturity or upon acceleration or redemption or
otherwise.
"Bonds" means the $23,000,000 Indiana Development Finance Authority
Environmental Refunding Revenue Bonds, Series 1998 (PSI Energy, Inc. Project),
issued by the Issuer pursuant to the Bond Resolution and the Indenture.
"Bonds Outstanding" or "Outstanding Bonds" means Outstanding Bonds as
defined in the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder and under the 1954
Code and any successor provisions to those Sections, regulations or proposed
regulations and, in addition, all applicable official rulings and judicial
determinations under the foregoing applicable to the Bonds.
"Conversion Date" means the Conversion Date as defined in the Indenture.
"Credit Facility" means a Credit Facility as defined in the Indenture.
"Credit Facility Account" means the Credit Facility Account as defined in
the Indenture.
"Credit Facility Issuer" means a Credit Facility Issuer as defined in the
Indenture.
"Eligible Investments" means Eligible Investments as defined in the
Indenture.
"Engineer" means an engineer (who may be an employee of the Company) or
engineering firm qualified to practice the profession of engineering under the
laws of the State and who or which is acceptable to the Trustee.
"EPA" means the Department of Environmental Management of the State and any
successor body, agency, commission or department.
"Event of Default" means any of the events described as an Event of Default
in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events described
as constituting Force Majeure in Section 7.1 hereof.
"Generating Stations" means collectively the Xxxxxx Generating Station,
Cayuga Generating Station, Edwardsport Generating Station, Xxxxxxxxx Generating
Station and the Wabash River Generating Station and "Generating Station" means
any one of such separately.
"Government Obligations" means Government Obligations as defined in the
Indenture.
"Holder" or "Holder of a Bond" means the Person in whose name a Bond is
registered on the Register.
"Indenture" means the Trust Indenture, dated as of the same date as this
Agreement, between the Issuer and the Trustee, as amended or supplemented from
time to time.
"Interest Rate for Advances" means the interest rate per year payable on
the Bonds.
"Letter of Credit" means the Letter of Credit as defined in the Indenture.
"Loan" means the loan by the Issuer to the Company of the proceeds received
from the sale of the Bonds.
"Loan Payment Date" means any date on which any Bond Service Charges are
due and payable.
"Loan Payments" means the amounts required to be paid by the Company in
repayment of the Loan pursuant to Section 4.1 hereof.
"1954 Code" means the Internal Revenue Code of 1954 as amended from time to
time through the date of enactment of the Code. References to the 1954 Code and
Sections of the 1954 Code include relevant applicable regulations (including
temporary regulations) and proposed regulations thereunder and any successor
provisions to those Sections, regulations or proposed regulations.
"Notice Address" means:
(a) As to the Issuer: Indiana Development Finance Authority
Xxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Executive Director
(b) As to the Company: PSI Energy, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Treasurer
with a copy to:
PSI Energy, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Treasurer
(c) As to the Trustee: The Fifth Third Bank of Central Indiana
Fifth Third Center
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Administration
or such additional or different address, notice of which is given under Section
8.3 hereof.
"Opinion of Bond Counsel" means a written opinion of nationally recognized
bond counsel selected by the Company and acceptable to the Trustee who is
experienced in matters relating to the exclusion from gross income for federal
income tax purposes of interest on obligations issued by states and their
political subdivisions. Bond Counsel may be counsel to the Trustee or the
Company.
"Original Purchaser" means the Original Purchaser as defined in the
Indenture.
"Paying Agent" means the Paying Agent as defined in the Indenture.
"Person" or words importing persons mean firms, associations, partnerships
(including without limitation, general and limited partnerships), limited
liability entities, joint ventures, societies, estates, trusts, corporations,
public or governmental bodies, other legal entities and natural persons.
"Pollution Control Facility" or "Pollution Control Facilities" means those
facilities which are pollution control facilities as defined in Section 24 of
Chapter 10.9 of the Act and those facilities described in Section 103(b)(4)(F)
of the Internal Revenue Code of 1954, as amended, and the final, proposed and
temporary regulations promulgated thereunder and other administrative authority
in effect.
"Project" or "Project Facilities" means the real, personal or real and
personal property, including undivided or other interests therein, identified in
the Project Description, financed with the proceeds of the Refunded Bonds.
"Project Description" means collectively the description of the Project
Facilities originally financed with the proceeds of the Refunded Bonds, attached
hereto as Exhibit A.
"Project Purposes" means the purposes of Pollution Control Facilities as
described in the Act and as particularly described in Exhibit A hereto.
"Project Site" means as applicable to the various Project Facilities the
respective Generating Station site.
"Rate Period" means a Rate Period as defined in the Indenture.
"Rebate Fund" means the Rebate Fund created in the Indenture.
"Refunded Bonds" means the $23,000,000 Indiana Employment Development
Commission 8 1/4% Environmental Revenue Bonds, Series 1988 (Public Service
Company of Indiana, Inc.) issued on July 7, 1988.
"Refunded Bonds Indenture" means the Trust Indenture dated as of June 15,
1988 between Bank One, Indianapolis, National Association (as successor to
American Xxxxxxxx National Bank and Trust Company) and the Indiana Employment
Development Commission, as predecessor of the Issuer.
"Refunded Bonds Loan Agreement" means the Loan Agreement dated as of June
15, 1988 between the Indiana Employment Development Commission, as predecessor
of the Issuer and Public Service Company of Indiana, Inc., as predecessor of the
Company, as amended as of March 15, 1990 and as of March 15, 1992.
"Refunded Bonds Trustee" means Bank One, Indianapolis, National Association
(as successor to American Xxxxxxxx National Bank and Trust Company), as trustee
under the Refunded Bonds Indenture.
"Refunding Fund" means the Refunding Fund created in the Indenture.
"Register" means the books kept and maintained for the registration and
transfer of Bonds pursuant to Section 3.05 of the Indenture.
"Registrar" means the Registrar as defined in the Indenture.
"Reimbursement Agreement" means the Reimbursement Agreement as defined in
the Indenture.
"Remarketing Agent" means the Remarketing Agent as defined in the
Indenture.
"Revenues" means (a) the Loan Payments, (b) all other moneys received or to
be received by the Issuer (excluding the Issuer Fee) or the Trustee in respect
of repayment of the Loan, including without limitation, all moneys and
investments in the Bond Fund, (c) any moneys and investments in the Refunding
Fund, and (d) all income and profit from the investment of the foregoing moneys.
The term "Revenues" does not include any moneys or investments in the Rebate
Fund or the Bond Purchase Fund.
"Solid Waste Disposal Facility" or "Solid Waste Disposal Facilities" means
those facilities defined as pollution control facilities in Section 24 of
Chapter 10.9 of the Act and those facilities described in Section 142(a)(6) of
the Code.
"State" means the State of Indiana.
"Term Rate Period" means a Term Rate Period as defined in the Indenture.
"Trustee" means The Fifth Third Bank of Central Indiana located in
Indianapolis, Indiana, a corporation duly organized and validly existing under
the laws of the State, until a successor Trustee shall have become such pursuant
to the applicable provisions of the Indenture, and thereafter "Trustee" shall
mean the successor Trustee. "Principal Office" of the Trustee shall mean the
principal corporate trust office of the Trustee, which office at the date of
issuance of the Bonds is located at its Notice Address.
"Unassigned Issuer Rights" means all of the rights of the Issuer to receive
Additional Payments under Section 4.2 hereof, to inspection pursuant to Section
5.1 hereof, to be held harmless and indemnified under Section 5.9 hereof, to be
reimbursed for attorney's fees and expenses under Section 7.4 hereof and to give
or withhold consent to amendments, changes, modifications, alterations and
termination of this Agreement under Section 8.6 hereof and its right to enforce
such rights.
"Variable Rate" means a Variable Rate as defined in the Indenture.
Section I.3. Interpretation. Any reference herein to the State, to the
Issuer or to any member or officer of either includes entities or officials
succeeding to their respective functions, duties or responsibilities pursuant to
or by operation of law or lawfully performing their functions.
Any reference to a section or provision of the Constitution of the State or
the Act, or to a section, provision or chapter of the Indiana Code, or to any
statute of the United States of America, includes that section, provision or
chapter as amended, modified, revised, supplemented or superseded from time to
time; provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable solely by reason
of this provision, if it constitutes in any way an impairment of the rights or
obligations of the Issuer, the State, the Holders, the Trustee, the Registrar,
an Authenticating Agent, a Paying Agent, any Credit Facility Issuer, the
Remarketing Agent, or the Company under this Agreement, the Indenture or the
Bonds.
Unless the context indicates otherwise, words importing the singular number
include the plural number, and vice versa; the terms "hereof", "hereby",
"herein", "hereto", "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Bonds. Words of any gender include the correlative words
of the other genders, unless the sense indicates otherwise.
Section I.4. Captions and Headings. The captions and headings in this
Agreement are used solely for convenience of reference and in no way define,
limit or describe the scope or intent of any Articles, Sections, subsections,
paragraphs or subparagraphs or clauses hereof.
(End of Article I)
ARTICLE II
REPRESENTATIONS
Section II.1. Representations of the Issuer. The Issuer represents that:
(a) it is a body corporate and politic duly organized and validly existing under
the laws of the State; (b) it has duly accomplished all conditions necessary to
be accomplished by it prior to the issuance and delivery of the Bonds and the
execution and delivery of this Agreement and the Indenture; (c) it is not in
violation of or in conflict with any provisions of the laws of the State which
would impair its ability to carry out its obligations contained in this
Agreement or the Indenture; (d) it is empowered to enter into the transactions
contemplated by this Agreement and the Indenture; (e) it has duly authorized the
execution, delivery and performance of this Agreement and the Indenture; (f) it
will do all things in its power in order to maintain its existence or assure the
assumption of its obligations under this Agreement and the Indenture by any
successor municipal corporation; and (g) following reasonable notice, a public
hearing was held on July 20, 1998 with respect to the issuance of the Bonds as
required by Section 147(f) of the Code.
Section II.2. No Warranty by Issuer of Condition or Suitability of the
Project. The Issuer makes no warranty, either express or implied, as to the
suitability or utilization of the Project for the Project Purposes, or as to the
condition of the Project Facilities or that the Project Facilities are or will
be suitable for the Company's purposes or needs.
Section II.3. Representations and Covenants of the Company. The Company
represents that:
(a) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State, with power and authority (corporate and
other) to own its properties and conduct its business, to execute and deliver
this Agreement and to perform its obligations under this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by the
Company and this Agreement constitutes a valid and legally binding obligation of
the Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(c) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby will not
violate any provision of law or regulation applicable to the Company, or of any
writ or decree of any court or governmental instrumentality, or of the Amended
Articles of Consolidation, as amended, or the By-laws of the Company, or of any
mortgage, indenture, contract, agreement or other undertaking to which the
Company is a party or which purports to be binding upon the Company or upon any
of its assets.
(d) The portions of the Project (i) which are Pollution Control Facilities
were designed to meet or exceed applicable federal, state and local requirements
then in effect for the control of air pollution and have been and will be used
to xxxxx or control air pollution or contamination by removing, altering,
disposing of or storing pollutants, contaminants, wastes or heat, and the
Pollution Control Facilities components of the Project as designed constitute
"air pollution control facilities" or facilities functionally related or
subordinate thereto within the meaning of Section 103(b)(4)(F) of the 1954 Code,
and the final, temporary and proposed regulations promulgated thereunder and
other administrative authority in effect; and (ii) which are Solid Waste
Disposal Facilities have been and will be used for the collection, storage,
treatment, utilization, processing or final disposal of solid waste and
constitute "solid waste disposal facilities" within the meaning of Section
142(a)(6) of the Code and the regulations applicable thereto.
(e) The Project has been and will be used wholly to control pollution and
dispose of solid waste and was designed for no significant purpose other than
pollution control and disposal of solid waste, and the Project was not designed
to result in an increase in production or capacity, in a material extension of
the useful life of the Generating Stations or, in the case of the portions of
the Project which are Pollution Control Facilities, in the recovery of
by-products of any substantial value
(f) Substantially all (at least 95%) of the proceeds of the Refunded Bonds
were used to provide "Solid Waste Disposal Facilities" within the meaning of
Section 142(a)(6) of the Code and "Pollution Control Facilities" within the
meaning of Section 103(b)(4)(F) of the 1954 Code.
(g) Acquisition, construction and installation or the incurrence of Cost of
Construction (as defined in the Refunded Bonds Loan Agreement) for the Pollution
Control Facilities portion of the Project or any separate facility thereof was
not commenced prior to the adoption of the resolution of the City of Princeton,
Indiana, on October 16, 1978; and acquisition, construction and installation or
the incurrence of Cost of Construction for the Solid Waste Disposal Facilities
portion of the Project or any separate facility thereof was not commenced prior
to the adoption of the resolution of the Issuer on April 18, 1988, and no such
portion of the Project had reached a degree of completion which would permit the
Company to operate the Project at substantially the level for which it was
designed and no such portion of the Project was, in fact, operated at such
design level prior to October 1, 1987.
(h) All of the proceeds of the Refunded Bonds were spent for the Project
pursuant to the Refunded Bonds Loan Agreement or to pay costs of issuance of the
Refunded Bonds. The proceeds of the Bonds (other than any accrued interest
thereon) will be used exclusively to refund the Refunded Bonds; any investment
earnings on such proceeds of the Bonds will be used to pay principal, premium or
interest on the Refunded Bonds; and none of the proceeds of the Bonds will be
used to pay for any costs of issuance of the Bonds. The principal amount of the
Bonds does not exceed the outstanding principal amount of the Refunded Bonds.
The proceeds of the Bonds will be used to retire the Refunded Bonds not later
than 90 days after the date of issuance of the Bonds.
(i) It has caused the Project to be substantially completed. The Project
constitutes Pollution Control Facilities under the Act and is consistent with
the purposes of the Act. The Project is being, and the Company will cause the
Project to be, operated and maintained in such manner to conform with all
applicable zoning, planning, building, environmental and other applicable
governmental regulations and all permits, variances and orders issued or granted
pursuant thereto, including the permit-to-install for the Project, which
permits, variances and orders have not been withdrawn or otherwise suspended,
and to be consistent with the Act.
(j) It has used or operated or has caused to be used or operated, and
presently intends to use or operate or cause to be used or operated the Project
Facilities in a manner consistent with the Project Purposes until the date on
which the Bonds have been fully paid and knows of no reason why the Project
Facilities will not be so operated. The Company does not intend to sell or
otherwise dispose of the Project or any portion thereof.
(k) None of the proceeds of the Refunded Bonds was used and none of the
proceeds of the Bonds will be used to provide any airplane, skybox or other
private luxury box, or health club facility, any facility primarily used for
gambling or any store the principal business of which is the sale of alcoholic
beverages for consumption off premises.
(l) Less than 25% of the proceeds of the Refunded Bonds have been used and
less than 25% of the proceeds of the Bonds will be used directly or indirectly
to acquire land or any interest therein, and none of such proceeds has been or
will be used to provide land which is to be used for farming purposes.
(m) No portion of the proceeds of the Refunded Bonds has been used and no
portion of the proceeds of the Bonds will be used to acquire existing property
or any interest therein unless the first use of such property was by the Company
and was pursuant to and followed such acquisition.
(n) At no time will any funds constituting gross proceeds of the Bonds be
used in a manner as would constitute failure of compliance with Section 148 of
the Code.
(o) The Refunded Bonds were not, and the Bonds will not be, "federally
guaranteed" within the meaning of Section 149(b) of the Code.
(p) It is not anticipated that as of the date hereof, there will be created
any "replacement proceeds", within the meaning of Section 1.148-1(c) of the
Treasury Regulations, with respect to the Bonds; however, in the event that any
such replacement proceeds are deemed to have been created, such amounts will be
invested in compliance with Section 148 of the Code.
(q) On the date of issuance and delivery of the Refunded Bonds, the Company
reasonably expected that at least 85% of the spendable proceeds of the Refunded
Bonds would be expended to carry out the governmental purpose of such issue
within the 3-year period beginning on the issue date of such issue and the
Company reasonably expected that the proceeds of the Refunded Bonds would be
spent in accordance with the spending requirements of Section 149(g)(2) of the
Code. All of the spendable proceeds of the Refunded Bonds were expended as of
the date of issuance of the Bonds. None of the proceeds of the Refunded Bonds
were invested in nonpurpose investments having a substantially guaranteed yield
for four years or more.
(r) The weighted average maturity of the Bonds does not exceed 120% of the
average reasonably expected economic life of the Project Facilities financed by
the proceeds of the Refunded Bonds (determined under Section 147(b) of the
Code).
(s) The information furnished by the Company and used by the Issuer in
preparing the certifications and statements pursuant to Sections 148 and 149(e)
of the Code or their statutory predecessors with respect to the Refunded Bonds
was accurate and complete as of the respective date of issuance of the Refunded
Bonds, and the information furnished by the Company and used by the Issuer in
preparing the certification pursuant to Section 148 of the Code and in preparing
the information statement pursuant to Section 149(e) of the Code, both referred
to in the Bond Resolution, will be accurate and complete as of the date of
issuance of the Bonds.
(t) The Project Facilities do not include any office except for offices (i)
located on the Project Site and (ii) not more than a de minimis amount of the
functions to be performed at which is not directly related to the day-to-day
operations of the Project Facilities.
(End of Article II)
ARTICLE III
COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS
Section III.1. Acquisition, Construction and Installation. The Company
represents that it has caused the Project Facilities to be acquired, constructed
and installed on the respective Project Sites, substantially in accordance with
the Project Description and in conformance with all applicable zoning, planning,
building and other similar regulations of all governmental authorities having
jurisdiction over the Project and all permits, variances and orders issued in
respect of the Project by EPA, and that the proceeds derived from the Refunded
Bonds, including any investment thereof, were expended in accordance with the
Refunded Bonds Indenture and the Refunded Bonds Loan Agreement, respectively.
Section III.2. Project Description. The Project Description may be changed
from time to time by, or with the consent of, the Company provided that any such
change shall also be filed with the Issuer and provided further that no change
in the Project Description shall materially change the function of the Project
Facilities unless the Trustee shall have received (i) an Engineer's certificate
that such changes will not impair the significance or character of the Project
Facilities as Pollution Control Facilities and (ii) an Opinion of Bond Counsel
or ruling of the Internal Revenue Service to the effect that such amendment will
not adversely affect the exclusion of interest on the Bonds from gross income
for federal income tax purposes.
Section III.3. Issuance of the Bonds; Application of Proceeds. To provide
funds to make the Loan to the Company to assist the Company in the refunding of
the Refunded Bonds, the Issuer will issue, sell and deliver the Bonds to the
Original Purchaser. The Bonds will be issued pursuant to the Indenture in the
aggregate principal amount, will bear interest, will mature and will be subject
to redemption as set forth therein. The Company hereby approves the terms and
conditions of the Indenture and the Bonds, and the terms and conditions under
which the Bonds will be issued, sold and delivered.
The Company hereby requests that the Issuer notify the Refunded Bonds
Trustee (unless the Refunded Bonds Trustee has already received such notice),
pursuant to the Refunded Bonds Indenture, that the entire outstanding principal
amount of the Refunded Bonds is to be redeemed on September 15, 1998 at a
redemption price of 102% of the principal amount thereof plus accrued interest
to that redemption date.
The proceeds from the sale of the Bonds (other than any accrued interest)
shall be loaned to the Company to assist the Company in refunding the Refunded
Bonds in order to reduce the interest cost payable by the Company; those
proceeds shall be deposited in the Refunding Fund. On September 15, 1998 all
moneys on deposit in the Refunding Fund shall be disbursed by the Trustee as
provided in Section 5.02 of the Indenture to the Refunded Bonds Trustee for
deposit in the Bond Fund created in the Refunded Bonds Indenture and applied by
the Refunded Bonds Trustee to the payment of principal of and interest on the
Refunded Bonds on their redemption on September 15, 1998. The Company shall pay
to the Refunded Bonds Trustee such additional amounts as shall be required to
pay in full on such date the entire amount of principal of, premium and interest
due on the Refunded Bonds.
Pending disbursement pursuant to this Section, the proceeds so deposited in
the Refunding Fund, together with any investment earnings thereon, shall
constitute a part of the Revenues assigned by the Issuer to the Trustee for the
payment of Bond Service Charges. Any accrued interest shall be deposited in the
Bond Fund.
Section III.4. Investment of Fund Moneys. At the oral (confirmed promptly
in writing) or written request of the Company, any moneys held as part of the
Bond Fund, the Refunding Fund or the Rebate Fund shall be invested or reinvested
by the Trustee in Eligible Investments; provided, that such moneys shall be
invested or reinvested by the Trustee only in Eligible Investments which shall
mature, or which shall be subject to redemption by the holder thereof at the
option of such holder, not later than the date upon which the moneys so invested
are needed to make payments from those Funds. The Issuer (to the extent it
retained or retains direction or control) and the Company each hereby represents
that the investment and reinvestment and the use of the proceeds of the Refunded
Bonds were restricted in such manner and to such extent as was necessary so that
the Refunded Bonds would not constitute arbitrage bonds under Section 148 of the
Code or its statutory predecessor and each hereby covenants that it will
restrict that investment and reinvestment and the use of the proceeds of the
Bonds in such manner and to such extent, if any, as may be necessary so that the
Bonds will not constitute arbitrage bonds under Section 148 of the Code.
The Company shall provide the Issuer with, and the Issuer may base its
certificate and statement, each as authorized by the Bond Resolution, on a
certificate of an appropriate officer, employee or agent of or consultant to the
Company for inclusion in the transcript of proceedings for the Bonds, setting
forth the reasonable expectations of the Company on the date of delivery of and
payment for the Bonds regarding the amount and use of the proceeds of the Bonds
and the facts, estimates and circumstances on which those expectations are
based.
Section III.5. Rebate Fund. To the extent required by Section 5.08 of the
Indenture, within five days after the end of the fifth Bond Year (as defined in
the Indenture) and every fifth Bond Year thereafter, and within five days after
payment in full of all outstanding Bonds, the Company shall calculate the amount
of Excess Earnings (as defined in the Indenture) as of the end of that Bond Year
or the date of such payment and shall notify the Trustee of that amount. If the
amount then on deposit in the Rebate Fund created under the Indenture is less
than the amount of Excess Earnings (computed by taking into account the amount
or amounts, if any, previously paid to the United States pursuant to Section
5.08 of the Indenture and this Section), the Company shall, within five days
after the date of the aforesaid calculation, pay to the Trustee for deposit in
the Rebate Fund an amount sufficient to cause the Rebate Fund to contain an
amount equal to the Excess Earnings. The obligation of the Company to make such
payments shall remain in effect and be binding upon the Company notwithstanding
the release and discharge of the Indenture. The Company shall obtain and keep
such records of the computations made pursuant to this Section as are required
under Section 148(f) of the Code.
(End of Article III)
ARTICLE IV
LOAN BY ISSUER; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND CREDIT FACILITY
Section IV.1. Loan Repayment. Upon the terms and conditions of this
Agreement, the Issuer agrees to make the Loan to the Company. The proceeds of
the Loan shall be deposited with the Trustee pursuant to Section 3.3 hereof. In
consideration of and in repayment of the Loan, the Company shall make, as Loan
Payments, to the Trustee for the account of the Issuer, payments which
correspond, as to time, and are equal in amount as of the Loan Payment Date, to
the corresponding Bond Service Charges payable on the Bonds. All Loan Payments
received by the Trustee shall be held and disbursed in accordance with the
provisions of the Indenture and this Agreement for application to the payment of
Bond Service Charges.
The Company shall be entitled to a credit against the Loan Payments
required to be made on any Loan Payment Date to the extent that the balance of
the Bond Fund is then in excess of amounts required (a) for the payment of Bonds
theretofore matured or theretofore called for redemption, or to be called for
redemption pursuant to Section 6.1 hereof (b) for the payment of interest for
which checks or drafts have been drawn and mailed by the Trustee or Paying
Agent, and (c) to be deposited in the Bond Fund by the Indenture for use other
than for the payment of Bond Service Charges due on that Loan Payment Date.
The Company's obligation to make Loan Payments shall be reduced to the
extent of any payments made by any Credit Facility Issuer to the Trustee in
respect of the principal of, premium, if any, or interest on the Bonds when due
pursuant to any Credit Facility then in effect, provided, that any such Credit
Facility Issuer has been reimbursed for such payments in accordance with the
terms of the Reimbursement Agreement.
Except for such interest of the Company as may hereafter arise pursuant to
Section 8.2 hereof or Sections 5.06 or 5.07 of the Indenture, the Company and
the Issuer each acknowledge that neither the Company, the State nor the Issuer
has any interest in the Bond Fund or the Bond Purchase Fund, and any moneys
deposited therein shall be in the custody of and held by the Trustee in trust
for the benefit of the Holders.
Section IV.2. Additional Payments. The Company shall pay to the Issuer, as
Additional Payments hereunder, any and all costs and expenses incurred or to be
paid by the Issuer in connection with the issuance and delivery of the Bonds or
otherwise related to actions taken by the Issuer under this Agreement or the
Indenture.
The Company shall pay the Administration Expenses to the Trustee, the
Registrar, the Remarketing Agent, and any Paying Agent or Authenticating Agent,
as appropriate, as Additional Payments hereunder.
The Company may, without creating a default hereunder, contest in good
faith the reasonableness of any such cost or expense incurred or to be paid by
the Issuer and any Administration Expenses claimed to be due to the Trustee, the
Registrar, the Remarketing Agent, any Paying Agent or any Authenticating Agent.
In the event the Company should fail to pay any Loan Payments, Additional
Payments or Administration Expenses when due, the payment in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid together with interest thereon during the default period at the
Interest Rate for Advances.
Section IV.3. Place of Payments. The Company shall make all Loan Payments
directly to the Trustee at its Principal Office. Additional Payments shall be
made directly to the person or entity to whom or to which they are due.
Section IV.4. Obligations Unconditional. The obligations of the Company to
make Loan Payments, Additional Payments and any payments required of the Company
under Section 5.08 of the Indenture shall be absolute and unconditional, and the
Company shall make such payments without abatement, diminution or deduction
regardless of any cause or circumstances whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim which the Company
may have or assert against the Issuer, the Trustee, the Registrar, the
Remarketing Agent or any other Person.
Section IV.5. Assignment of Revenues and Agreement. To secure the payment
of Bond Service Charges, the Issuer shall, by the Indenture, (a) absolutely and
irrevocably assign to the Trustee, its successors in trust and its and their
assigns forever, (1) all right, title and interest of the Issuer in and to all
moneys and investments (including, without limitation, the proceeds of the
Credit Facility) in the Bond Fund and (2) all of the Issuer's rights and
remedies under this Agreement (except for the Unassigned Issuer Rights), and (b)
grant a security interest to the Trustee, its successors in trust and its and
their assigns forever, in all of its rights to and interest in the Revenues
including, without limitation, all Loan Payments and other amounts receivable by
or on behalf of the Issuer under the Agreement in respect of repayment of the
Loan (other than the Credit Facility Account, all moneys and investments therein
and the proceeds of any Credit Facility). The Company hereby agrees and consents
to those assignments and that grant of a security interest.
Section IV.6. Credit Facility; Alternate Credit Facility; Cancellation. (a)
The Company agrees to provide for the payment of the principal of and interest
on the Bonds and for payment of the purchase price of Bonds delivered to the
Trustee or Paying Agent pursuant to the Indenture by causing the Letter of
Credit to be delivered to the Trustee on the date of the delivery of the Bonds.
The Company hereby authorizes and directs the Trustee to draw moneys under the
Letter of Credit in accordance with its terms and the terms of the Indenture, to
the extent necessary to pay the principal of and interest on the Bonds when due
and to pay the purchase price of Bonds as provided in the Indenture. The Company
may, at its election and with the consent of the Bank, provide for one or more
extensions of the Letter of Credit beyond its then stated date of expiration.
(b) Upon satisfaction of the requirements contained in Section 14.03 of the
Indenture, the Company may provide for the delivery of an Alternate Credit
Facility.
(c) Upon satisfaction of the conditions contained in Section 14.02 of the
Indenture, the Company may cancel any Credit Facility then in effect at such
time and direct the Trustee in writing to surrender such Credit Facility to the
Credit Facility Issuer by which it was issued in accordance with the Indenture;
provided, that no such cancellation shall become effective and no such surrender
shall take place until all Bonds subject to purchase pursuant to Section 4.07(d)
of the Indenture have been so purchased or redeemed with the proceeds of such
Credit Facility.
Section IV.7. Company's Option to Elect Rate Period. The Company shall
have, and is hereby granted, the option to elect to convert on any Conversion
Date the interest rate borne by the Bonds to another Variable Rate to be
effective for a Rate Period pursuant to the provisions of Article II of the
Indenture and subject to the terms and conditions set forth therein. To exercise
such options, the Company shall give the written notice required by the
Indenture.
Section IV.8. Company's Obligation to Purchase Bonds. The Company hereby
agrees to pay or cause to be paid to the Trustee or the Paying Agent, on or
before each day on which Bonds may be or are required to be tendered for
purchase, amounts equal to the amounts to be paid by the Trustee or the Paying
Agent with respect to the Bonds tendered for purchase on such dates pursuant to
Article IV of the Indenture; provided, however, that the obligation of the
Company to make any such payment under this Section shall be reduced by the
amount of (A) moneys paid by the Remarketing Agent as proceeds of the
remarketing of such Bonds by the Remarketing Agent, (B) moneys drawn under any
Credit Facility, for the purpose of paying such purchase price and (C) other
moneys made available by the Company, as set forth in Section 4.08(b)(ii) of the
Indenture.
(End of Article IV)
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section V.1. Right of Inspection. The Company agrees that, subject to
reasonable security and safety regulations and to reasonable requirements as to
notice, the Issuer and the Trustee and their or any of their respective duly
authorized agents shall have the right at all reasonable times to enter upon the
Project Site to examine and inspect the Projects.
Section V.2. Maintenance. The Company shall use its best efforts to keep
and maintain the Project Facilities, including all appurtenances thereto and any
personal property therein or thereon, in good repair and good operating
condition so that the Project Facilities will continue to constitute Pollution
Control Facilities or Solid Waste Disposal Facilities, for the purposes of the
operation thereof as required by Section 5.4 hereof.
So long as such shall not be in violation of the Act or impair the
character of the Project Facilities as Pollution Control Facilities or Solid
Waste Disposal Facilities, and provided there is continued compliance with
applicable laws and regulations of governmental entities having jurisdiction
thereof, the Company shall have the right to remodel the Project Facilities or
make additions, modifications and improvements thereto, from time to time as it,
in its discretion, may deem to be desirable for its uses and purposes, the cost
of which remodeling, additions, modifications and improvements shall be paid by
the Company and the same shall, when made, become a part of the Project
Facilities.
Section V.3. Removal of Portions of the Project Facilities. The Company
shall not be under any obligation to renew, repair or replace any inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary portions of the
Project Facilities, except that, subject to Section 5.4 hereof, it will use its
best efforts to ensure the continued character of the Project Facilities as
Pollution Control Facilities or Solid Waste Disposal Facilities. The Company
shall have the right from time to time to substitute personal property or
fixtures for any portions of the Project Facilities, provided that the personal
property or fixtures so substituted shall not impair the character of the
Project Facilities as Pollution Control Facilities or Solid Waste Disposal
Facilities. Any such substituted property or fixtures shall, when so
substituted, become a part of the Project Facilities. The Company shall also
have the right to remove any portion of the Project Facilities, without
substitution therefor; provided, that the Company shall deliver to the Trustee a
certificate signed by an Engineer describing said portion of the Project
Facilities and stating that the removal of such property or fixtures will not
impair the character of the Project Facilities as Pollution Control Facilities
or Solid Waste Disposal Facilities.
Section V.4. Operation of Project Facilities. The Company will, subject to
its obligations and rights to maintain, repair or remove portions of the Project
Facilities, as provided in Sections 5.2 and 5.3 hereof, use its best efforts to
continue operation of the Project Facilities so long as and to the extent that
operation thereof is required to comply with laws or regulations of governmental
entities having jurisdiction thereof or unless the Issuer shall have approved
the discontinuance of such operation (which approval shall not be unreasonably
withheld). The Company agrees that it will, within the design capacities
thereof, use its best efforts to operate and maintain the Project Facilities in
accordance with all applicable, valid and enforceable rules and regulations of
governmental entities having jurisdiction thereof; provided, that the Company
reserves the right to contest in good faith any such laws or regulations.
Nothing in this Agreement shall prevent or restrict the Company, in its
sole discretion, at any time, from discontinuing or suspending either
permanently or temporarily its use of any facility of the Company served by the
Project Facilities and in the event such discontinuance or suspension shall
render unnecessary the continued operation of the Project Facilities, the
Company shall have the right to discontinue the operation of the Project
Facilities during the period of any such discontinuance or suspension.
Section V.5. Insurance. The Company shall cause the Project Facilities to
be kept insured against fire or other casualty to the extent that property of
similar character is usually so insured by companies similarly situated and
operating like properties, to a reasonable amount by reputable insurance
companies or, in lieu of or supplementing such insurance in whole or in part,
adopt some other method or plan of protection against loss by fire or other
casualty at least equal in protection to the method or plan of protection
against loss by fire or other casualty of companies similarly situated and
operating properties subject to similar or greater fire or other hazards or on
which properties an equal or higher primary fire or other casualty insurance
rate has been set by reputable insurance companies.
Section V.6. Workers' Compensation Coverage. Throughout the term of this
Agreement, the Company shall comply, or cause compliance, with applicable
workers' compensation laws of the State.
Section V.7. Damage; Destruction and Eminent Domain. If, during the term of
this Agreement, the Project Facilities or any portion thereof is destroyed or
damaged in whole or in part by fire or other casualty, or title to, or the
temporary use of, the Project Facilities or any portion thereof shall have been
taken by the exercise of the power of eminent domain, the Company (unless it
shall have exercised its option to prepay the Loan Payments pursuant to Section
6.2 hereof) shall promptly repair, rebuild or restore the portion of the Project
Facilities so damaged, destroyed or taken with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be necessary or desirable for the administration and operation of the Project
Facilities as Pollution Control Facilities or Solid Waste Disposal Facilities
and as shall not impair the character or significance of the Project Facilities
as furthering the purposes of the Act.
Section V.8. Company to Maintain its Corporate Existence; Conditions Under
Which Exceptions Permitted. The Company agrees that, during the term of this
Agreement, it will maintain its corporate existence, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another corporation or permit one or more other
corporations to consolidate with or merge into it; provided that the Company
may, without violating its agreement contained in this Section, consolidate with
or merge into another corporation, or permit one or more other corporations to
consolidate with or merge into it, or sell or otherwise transfer to another
corporation all or substantially all of its assets as an entirety and thereafter
dissolve, provided the surviving, resulting or transferee corporation, as the
case may be (if other than the Company), is a corporation organized and existing
under the laws of one of the states of the United States, and assumes in writing
all of the obligations of the Company herein, and, if not an Indiana
corporation, is qualified to do business in the State.
If consolidation, merger or sale or other transfer is made as provided in
this Section, the provisions of this Section 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.
Section V.9. Indemnification. The Company releases the Issuer from, agrees
that the Issuer shall not be liable for, and indemnifies the Issuer against, all
liabilities, claims, costs and expenses imposed upon or asserted against the
Issuer on account of: (a) any loss or damage to property or injury to or death
of or loss by any person that may be occasioned by any cause whatsoever
pertaining to the construction, maintenance, operation and use of the Project
Facilities; (b) any breach or default on the part of the Company in the
performance of any covenant or agreement of the Company under this Agreement or
any related document, or arising from any act or failure to act by the Company,
or any of its agents, contractors, servants, employees or licensees; (c) the
authorization, issuance and sale of the Bonds, and the provision of any
information furnished in connection therewith concerning the Project Facilities
or the Company (including, without limitation, any information furnished by the
Company for inclusion in any certifications made by the Issuer under Section 3.4
hereof or for inclusion in, or as a basis for preparation of, the Form 8038
information statement to be filed by the Issuer); and (d) any claim or action or
proceeding with respect to the matters set forth in (a), (b) and (c) above
brought thereon.
The Company agrees to indemnify the Trustee, the Paying Agent, the
Remarketing Agent and the Registrar (each hereinafter referred to in this
section as an "indemnified party") for and to hold each of them harmless against
all liabilities, claims, costs and expenses incurred without negligence or
willful misconduct on the part of the indemnified party, on account of any
action taken or omitted to be taken by the indemnified party in accordance with
the terms of this Agreement, the Bonds or the Indenture or any action taken at
the request of or with the consent of the Company, including the costs and
expenses of the indemnified party in defending itself against any such claim,
action or proceeding brought in connection with the exercise or performance of
any of its powers or duties under this Agreement, the Bonds or the Indenture.
In case any action or proceeding is brought against the Issuer, or an
indemnified party in respect of which indemnity may be sought hereunder, the
party seeking indemnity promptly shall give notice of that action or proceeding
to the Company, and the Company upon receipt of that notice shall have the
obligation and the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not relieve the
Company from any of its obligations under this Section unless that failure
prejudices the defense of the action or proceeding by the Company. At its own
expense, an indemnified party may employ separate counsel and participate in the
defense; provided, however, where it is ethically inappropriate for one firm to
represent the interests of the Issuer, and any other indemnified party or
parties, the Company shall pay the Issuer's legal expenses in connection with
the Issuer's retention of separate counsel. The Company shall not be liable for
any settlement made without its consent.
The indemnification set forth above is intended to and shall include the
indemnification of all affected officials, directors, officers and employees of
the Issuer, the Trustee, the Paying Agent, the Remarketing Agent and the
Registrar, respectively. That indemnification is intended to and shall be
enforceable by the Issuer, the Trustee, the Paying Agent, the Remarketing Agent
and the Registrar, respectively, to the full extent permitted by law.
Section V.10. Company Not to Adversely Affect Exclusion of Interest on
Bonds From Gross Income For Federal Income Tax Purposes. The Company hereby
covenants and represents that it has taken and caused to be taken and shall take
and cause to be taken all actions that may be required of it for the interest on
the Bonds to be and remain excluded from the gross income of the Holders for
federal income tax purposes, and that it has not taken or permitted to be taken
on its behalf, and covenants that it will not take, or permit to be taken on its
behalf, any action which, if taken, would adversely affect that exclusion under
the provisions of the Code.
Section V.11. Use of Project Facilities. The Issuer agrees that it will not
take any action, or cause any action to be taken on its behalf, to interfere
with the Company's ownership interest in the Project or to prevent the Company
from having possession, custody, use and enjoyment of the Project other than
pursuant to Article VII of this Agreement or Article VII of the Indenture.
Section V.12. Assignment by Company. This Agreement may be assigned in
whole or in part by the Company without the necessity of obtaining the consent
of either the Issuer or the Trustee, subject, however, to each of the following
conditions:
(a) No assignment (other than pursuant to Section 5.8 hereof) shall relieve
the Company from primary liability for any of its obligations hereunder, and in
the event of any such assignment the Company shall continue to remain primarily
liable for the payment of the Loan Payments and Additional Payments and for
performance and observance of the agreements on its part herein provided to be
performed and observed by it.
(b) Any assignment by the Company must retain for the Company such rights
and interests as will permit it to perform its obligations under this Agreement,
and any assignee from the Company shall assume the obligations of the Company
hereunder to the extent of the interest assigned.
(c) The Company shall, within 30 days after execution thereof, furnish or
cause to be furnished to the Issuer and the Trustee a true and complete copy of
each such assignment together with any instrument of assumption. (d) Any
assignment from the Company shall not materially impair fulfillment of the
Project Purposes to be accomplished by operation of the Project as herein
provided.
(End of Article V)
ARTICLE VI
REDEMPTION
Section VI.1. Optional Redemption. Provided no Event of Default shall have
occurred and be subsisting, at any time and from time to time, the Company may
deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of calling Bonds for optional redemption in accordance
with the applicable provisions of the Indenture providing for optional
redemption at the redemption price stated in the Indenture. Pending application
for those purposes, any moneys so delivered shall be held by the Trustee in a
special account in the Bond Fund and delivery of those moneys shall not, except
as set forth in Section 4.1 hereof, operate to xxxxx or postpone Loan Payments
or Additional Payments otherwise becoming due or to alter or suspend any other
obligations of the Company under this Agreement.
Section VI.2. Extraordinary Optional Redemption. The Company shall have,
subject to the conditions hereinafter imposed, the option during a Term Rate
Period to direct the redemption of the Bonds in whole upon the occurrence of the
event described below in paragraph (c) and in part upon the occurrence of the
other events described below in accordance with the applicable provisions of the
Indenture. In the event that any of the events described below affect less than
all of the Project Facilities and the Generating Stations which they serve, the
Bonds may be redeemed in an amount equal to the outstanding principal amount of
the Bonds multiplied by the allocable percentage figure for each Project
Facility, to-wit: 43.5% for Facility 1, 1% for Facility 2, 0% for Facility 3, 0%
for Facility 4, 5% for Facility 5, 44.5% for Facility 6, 0% for Facility 7 and
6% for Facility 8.
(a) One or more of the Project Facilities or the Generating Stations which
they serve shall have been damaged or destroyed to such an extent that (1) such
Project Facilities or such Generating Stations cannot reasonably be expected to
be restored, within a period of six consecutive months, to the condition thereof
immediately preceding such damage or destruction or (2) the Company is
reasonably expected to be prevented from carrying on its normal use and
operation of such Project Facilities or such Generating Stations for a period of
six consecutive months.
(b) Title to, or the temporary use of, all or a significant part of one or
more of the Project Facilities or the Generating Stations which they serve shall
have been taken under the exercise of the power of eminent domain to such an
extent (1) that such Project Facilities or such Generating Stations cannot
reasonably be expected to be restored within a period of six consecutive months
to a condition of usefulness comparable to that existing prior to the taking or
(2) the Company is reasonably expected to be prevented from carrying on its
normal use and operation of such Project Facilities or such Generating Stations
for a period of six consecutive months.
(c) As a result of any changes in the Constitution of the State, the
Constitution of the United States of America or any state or federal laws or as
a result of legislative or administrative action (whether state or federal) or
by final decree, judgment or order of any court or administrative body (whether
state or federal) entered after any contest thereof by the Issuer or the Company
in good faith, this Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purpose of the
parties as expressed in this Agreement.
(d) Unreasonable burdens or excessive liabilities shall have been imposed
upon the Issuer or the Company with respect to one or more of the Project
Facilities or the Generating Stations which they serve or the operation thereof,
including, without limitation, the imposition of federal, state or other ad
valorem, property, income or other taxes other than ad valorem taxes at the
rates presently levied upon privately owned property used for the same general
purpose as such Project Facilities or such Generating Stations.
(e) Changes in the economic availability of raw materials, operating
supplies, energy sources or supplies or facilities (including, but not limited
to, facilities in connection with the disposal of industrial wastes) necessary
for the operation of one or more of the Project Facilities or the Generating
Stations which they serve for the Project Purposes occur or technological or
other changes occur which the Company cannot reasonably overcome or control and
which in the Company's reasonable judgment render such Project Facilities or
such Generating Stations uneconomic or obsolete for the Project Purposes.
(f) Any court or administrative body shall enter a judgment, order or
decree, or shall take administrative action, requiring the Company to cease all
or any substantial part of its operations served by one or more of the Project
Facilities or the Generating Stations which they serve to such extent that the
Company is or will be prevented from carrying on its normal operations at such
Project Facilities or such Generating Stations for a period of six consecutive
months.
(g) The termination by the Company of operations at any of the Generating
Stations which are served by any of the Project Facilities.
The amount payable by the Company in the event of its exercise of the
option granted in this Section shall be the sum of the following:
(i) An amount of money which, when added to the moneys and investments
held to the credit of the Bond Fund, will be sufficient pursuant to the
provisions of the Indenture to pay, at 100% of the principal amount thereof
plus accrued interest to the redemption date, and discharge, all or such
portion of Outstanding Bonds to be redeemed on the earliest applicable
redemption date, that amount to be paid to the Trustee, plus
(ii) An amount of money equal to the Additional Payments relating to
those Bonds accrued and to accrue until actual final payment and redemption
of those Bonds, that amount or applicable portions thereof to be paid to
the Trustee or to the Persons to whom those Additional Payments are or will
be due.
The requirement of (ii) above with respect to Additional Payments to accrue
may be met if provisions satisfactory to the Trustee and the Issuer are made for
paying those amounts as they accrue.
The rights and options granted to the Company in this Section may be
exercised whether or not the Company is in default hereunder; provided, that
such default will not relieve the Company from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section VI.3. Mandatory Redemption. The Company shall deliver to the
Trustee the moneys needed to redeem the Bonds in accordance with any mandatory
redemption provisions relating thereto as may be set forth in Sections 4.01(b)
of the Indenture.
Section VI.4. Notice of Redemption. In order to exercise an option granted
in, or to consummate a redemption required by, this Article VI, the Company
shall, within 180 days following the event authorizing the exercise of such
option, or at any time during the continuation of the condition referred to in
paragraphs (c), (d) or (e) of Section 6.2 hereof, or at any time that optional
redemption of the Bonds is permitted under the Indenture as provided in Section
6.1 hereof, or promptly upon the occurrence of a Determination of Taxability (as
defined in the Indenture), give written notice to the Issuer and the Trustee
that it is exercising its option to direct the redemption of Bonds, or that the
redemption thereof is required by Section 4.01(b) of the Indenture due to the
occurrence of a Determination of Taxability, as the case may be, in accordance
with the Agreement and the Indenture, and shall specify therein the date on
which such redemption is to be made, which date shall not be more than 180 days
from the date such notice is mailed. The Company shall make arrangements
satisfactory to the Trustee for the giving of the required notice of redemption
to the Holders of the Bonds, in which arrangements the Issuer shall cooperate.
Section VI.5. Actions by Issuer. At the request of the Company or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
(End of Article VI)
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section VII.1. Events of Default. Each of the following shall be an Event
of Default:
(a) The occurrence of an event of default as defined in Section 7.01 (a),
(b), (c) or (d) of the Indenture;
(b) The Company shall fail to observe and perform any other agreement, term
or condition contained in this Agreement, other than such failure as will have
resulted in an event of default described in (a) above and the continuation of
that failure for a period of 90 days after notice thereof shall have been given
to the Company by the Issuer or the Trustee, or for such longer period as the
Issuer and the Trustee may agree to in writing; provided, that failure shall not
constitute an Event of Default so long as the Company institutes curative action
within the applicable period and diligently pursues that action to completion
within 150 days after the expiration of initial cure period as determined above,
or within such longer period as the Issuer and the Trustee may agree to in
writing; and
(c) By decree of a court of competent jurisdiction the Company shall be
adjudicated a bankrupt, or an order shall be made approving a petition or answer
filed seeking reorganization or readjustment of the Company under the federal
bankruptcy laws or other law or statute of the United States of America or of
the state of incorporation of the Company or of any other state, or, by order of
such a court, a trustee in bankruptcy, a receiver or receivers shall be
appointed of all or substantially all of the property of the Company, and any
such decree or order shall have continued unstayed on appeal or otherwise and in
effect for a period of sixty (60) days; and
(d) The Company shall file a petition in voluntary bankruptcy or shall make
an assignment for the benefit of creditors or shall consent to the appointment
of a receiver or receivers of all or any part of its property, or shall file a
petition seeking reorganization or readjustment under the Federal bankruptcy
laws or other law or statute of the United States of America or any state
thereof, or shall file a petition to take advantage of any debtors' act.
Notwithstanding the foregoing, if, by reason of Force Majeure, the Company
is unable to perform or observe any agreement, term or condition hereof which
would give rise to an Event of Default under subsection (b) hereof, the Company
shall not be deemed in default during the continuance of such inability.
However, the Company shall promptly give notice to the Trustee and the Issuer of
the existence of an event of Force Majeure and shall use its best efforts to
remove the effects thereof; provided that the settlement of strikes or other
industrial disturbances shall be entirely within its discretion.
The term Force Majeure shall mean the following:
(i) acts of God; strikes, lockouts or other industrial disturbances;
acts of public enemies; orders or restraints of any kind of the government
of the United States of America or of the State or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, nuclear accidents or other malfunction or accident to facilities,
machinery, transmission pipes or canals; partial or entire failure of a
utility serving the Project; shortages of labor, materials, supplies or
transportation; or
(ii) any cause, circumstance or event not reasonably within the
control of the Company.
The exercise of remedies hereunder shall be subject to any applicable
limitations of federal bankruptcy law affecting or precluding that declaration
or exercise during the pendency of or immediately following any bankruptcy,
liquidation or reorganization proceedings.
Section VII.2. Remedies on Default. Whenever an Event of Default shall have
happened and be subsisting, either or both of the following remedial steps may
be taken:
(a) The Issuer or the Trustee may have access to, inspect, examine and
make copies of the books, records, accounts and financial data of the
Company, only, however, insofar as they pertain to the Project; or
(b) The Issuer or the Trustee may pursue all remedies now or hereafter
existing at law or in equity to recover all amounts, including all Loan
Payments and Additional Payments and under Section 4.8 hereof the purchase
price of Bonds tendered for purchase, then due and thereafter to become due
under this Agreement, or to enforce the performance and observance of any
other obligation or agreement of the Company under this Agreement.
Notwithstanding the foregoing, the Issuer shall not be obligated to take
any step which in its opinion will or might cause it to expend time or money or
otherwise incur liability unless and until a satisfactory indemnity bond has
been furnished to the Issuer at no cost or expense to the Issuer. Any amounts
collected as Loan Payments or applicable to Loan Payments and any other amounts
which would be applicable to payment of Bond Service Charges collected pursuant
to action taken under this Section shall be paid into the Bond Fund and applied
in accordance with the provisions of the Indenture or, if the outstanding Bonds
have been paid and discharged in accordance with the provisions of the
Indenture, shall be paid as provided in Section 5.07 of the Indenture for
transfers of remaining amounts in the Bond Fund.
The provisions of this Section are subject to the further limitation that
the rescission and annulment by the Trustee of its declaration that all of the
Bonds are immediately due and payable also shall constitute a rescission and
annulment of any corresponding declaration made pursuant to this Section and a
rescission and annulment of the consequences of that declaration and of the
Event of Default with respect to which that declaration has been made, provided
that no such rescission and annulment shall extend to or affect any subsequent
or other default or impair any right consequent thereon.
Section VII.3. No Remedy Exclusive. No remedy conferred upon or reserved to
the Issuer or the Trustee by this Agreement is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, or now or hereafter existing at law, in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall
impair that 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 Issuer or the Trustee to exercise any
remedy reserved to it in this Article, it shall not be necessary to give any
notice, other than any notice required by law or for which express provision is
made herein.
Section VII.4. Agreement to Pay Attorneys' Fees and Expenses. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees, in connection with the enforcement of this Agreement
or the collection of sums due hereunder, the Company shall be required, to the
extent permitted by law, to reimburse the Issuer and the Trustee, as applicable,
for the expenses so incurred upon demand.
Section VII.5. No Waiver. No failure by the Issuer or the Trustee to insist
upon the strict performance by the Company of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Company to observe or comply with any provision hereof.
Section VII.6. Notice of Default. The Company shall notify the Trustee and
the Credit Facility Issuer immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event which, with
the giving of notice or passage of time or both, would become an Event of
Default.
(End of Article VII)
ARTICLE VIII
MISCELLANEOUS
Section VIII.1. Term of Agreement. This Agreement shall be and remain in
full force and effect from the date of delivery of the Bonds to the Original
Purchaser until such time as (i) all of the Bonds shall have been fully paid (or
provision made for such payment) and the Indenture has been released pursuant to
Section 9.01 thereof and (ii) all other sums payable by the Company under this
Agreement shall have been paid; provided, however, the obligations of the
Company under Sections 4.2 and 5.9 hereof shall survive any termination of this
Agreement.
Section VIII.2. Amounts Remaining in Funds. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption, upon acceleration or
otherwise), at the option of the Company, shall be deemed to belong to and shall
be paid, subject to Section 5.06 of the Indenture, at the written request of the
Company, to the Company by the Trustee. With respect to that principal of and
any premium and interest on the Bonds to be paid from moneys paid to the Company
pursuant to the preceding sentence, the Holders of the Bonds entitled to those
moneys shall look solely to the Company for the payment of those moneys.
Further, any amounts remaining in the Bond Fund and any other special funds or
accounts created under this Agreement or the Indenture, except the Rebate Fund,
after all of the Bonds shall be deemed to have been paid and discharged under
the provisions of the Indenture and all other amounts required to be paid under
this Agreement and the Indenture have been paid, shall be paid to the Company to
the extent that those moneys are in excess of the amounts necessary to effect
the payment and discharge of the Outstanding Bonds.
Section VIII.3. Notices. All notices, certificates, requests or other
communications hereunder shall be in writing, except as provided in Section 3.4
hereof, and shall be deemed to be sufficiently given when mailed by registered
or certified mail, postage prepaid, and addressed to the appropriate Notice
Address. A duplicate copy of each notice, certificate, request or other
communication given hereunder to the Issuer, the Company, any Credit Facility
Issuer or the Trustee shall also be given to the others. The Company, the
Issuer, any Credit Facility Issuer and the Trustee, by notice given hereunder,
may designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
Section VIII.4. Extent of Covenants of the Issuer; No Personal Liability.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer in other than his official
capacity, and neither the members of the Issuer nor any official executing the
Bonds shall be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance thereof or by reason of
the covenants, obligations or agreements of the Issuer contained in this
Agreement or in the Indenture. Section VIII.5. Binding Effect. This Agreement
shall inure to the benefit of and shall be binding in accordance with its terms
upon the Issuer, the Company and their respective permitted successors and
assigns provided that this Agreement may not be assigned by the Company (except
as permitted under Sections 5.8 or 5.12 hereof) and may not be assigned by the
Issuer except to (i) the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges or (ii) any
successor public body to the Issuer.
Section VIII.6. Amendments and Supplements. Except as otherwise expressly
provided in this Agreement or the Indenture, subsequent to the issuance of the
Bonds and prior to all conditions provided for in the Indenture for release of
the Indenture having been met, this Agreement may not be effectively amended,
changed, modified, altered or terminated by the parties hereto except with the
consents required by, and in accordance with, the provisions of Article XI of
the Indenture, as applicable.
Section VIII.7. References to Credit Facility. During such time or times as
no Credit Facility is in effect, and during the continuation of any event of
default under the Indenture due to a failure by the Credit Facility Issuer to
honor a drawing by the Trustee under the Credit Facility then in effect in
accordance with the terms thereof, references herein to the Credit Facility
Issuer shall be ineffective.
Section VIII.8. Execution Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section VIII.9. Severability. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein is determined by a judicial
or administrative authority to be invalid or unenforceable, that determination
shall not affect any other provision, covenant, obligation or agreement, each of
which shall be construed and enforced as if the invalid or unenforceable portion
were not contained herein. That invalidity or unenforceability shall not affect
any valid and enforceable application thereof, and each such provision,
covenant, obligation or agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by
law.
Section VIII.10. Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
(End of Article VIII)
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be duly executed in their respective names, all as of the date
hereinbefore written.
INDIANA DEVELOPMENT FINANCE AUTHORITY
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx, Chairman
Attest:
/s/ Xxxxxx XxXxxxx
--------------------------------------------
Xxxxxx XxXxxxx, Designee of the Lt. Governor
PSI ENERGY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Treasurer
Exhibit A
DESCRIPTION OF SOLID WASTE DISPOSAL AND
POLLUTION CONTROL FACILITIES
The Project as amended is comprised of the following Solid Waste
Disposal Facilities and Pollution Control Facilities constructed and installed
in connection with the following Generating Stations.
Facility 1 - Flue gas desulfurization system and sludge fixation system for
Xxxxxx Generating Station, Unit 5, including facilities for transport of
fly ash for sludge fixation purposes and modifications and upgrades to the
Company's undivided ownership interest in the Xxxxxx Generating Station,
Unit 5, ash handling and sludge disposal system.
Facility 2 - An ash sluice pump, ash pond dike addition and an irrigation system
functionally related and subordinate to the ash handling and disposal
system for the Cayuga Generating Station.
Facility 3 - Surfacing of loading area for loading of unregenerated spent resin
on industrial vacuum trucks for the disposal of the unregenerated spend
resin for the Cayuga Generating Station.
Facility 4 - The discrete portions of the demineralizer used in the regeneration
of spent resin or the Edwardsport Generating Station.
Facility 5 - Miscellaneous improvements to the ash handling and disposal system
for the Xxxxxxxxx Generating Station, including the replacement of
insulation on Xxxxx Xx. 0, Xx. 0 and No. 4 economizer hoppers, replacement
of Xxxx Xx. 0, Xx. 0 and No. 4 economizer dust lines, replacement of ash
sluice pumps and replacement of low pressure service water pumps for Units
1, 2, 3 and 4.
Facility 6 - Miscellaneous improvements to and expansion of ash handling and
disposal facilities for the Xxxxxx Generating Station, including the
acquisition of land and construction of a 500 acre ash storage pond for
Unit 5, replacement of ash sluice 2B pump, motor, coupling and monitoring
relay for Xxxx 0, replacement of ash sluice 4A pump and extensions of
existing ash transport lines for Xxxx 0, and improvements and modifications
of fly ash disposal equipment for Xxxx 0 and Unit 2.
Facility 7 - Addition to landfill aggregate materials building for housing of
solid waste transport and disposal equipment for the Xxxxxx Generating
Station Unit 5.
Facility 8 - Miscellaneous improvements to and expansion of ash handling and
disposal facilities for the Wabash River Generating Station, including an
ash xxxxxx modifications for Wabash River Generating Station, Units 1-6.
