LOAN AGREEMENT
between
INDIANA DEVELOPMENT FINANCE AUTHORITY
and
PSI ENERGY, INC.
_______________________________
$77,125,000
Indiana Development Finance Authority
Environmental Revenue Bonds, Series 2004B
(PSI Energy, Inc. Projects)
_______________________________
Dated
as of
December 1, 2004
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.....................................................3
Section 1.1. Use of Defined Terms............................................3
Section 1.2. Definitions.....................................................3
Section 1.3. Interpretation..................................................6
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 Projects...............................................8
Section 2.3. Representations and Covenants of the Company....................8
ARTICLE III. COMPLETION OF THE PROJECTS; ISSUANCE OF THE BONDS..............11
Section 3.1. Acquisition, Construction and Installation.....................11
Section 3.2. Project Descriptions...........................................11
Section 3.3. Issuance of the Bonds; Application of Proceeds.................11
Section 3.4. Disbursements from the Project Fund............................12
Section 3.5. Company Required to Pay Costs in Event Project
Fund Insufficient..............................................14
Section 3.6. Completion Date................................................14
Section 3.7. Investment of Fund Moneys......................................14
Section 3.8. Agreement as to Ownership of Projects..........................15
Section 3.9. Use of Projects................................................15
Section 3.10. Rebate Fund....................................................15
ARTICLE IV. LOAN BY ISSUER; LOAN PAYMENTS; ADDITIONAL PAYMENTS;
CREDIT FACILITY..............................................16
Section 4.1. Loan Repayment.................................................16
Section 4.2. Additional Payments............................................16
Section 4.3. Place of Payments..............................................17
Section 4.4. Obligations Unconditional......................................17
Section 4.5. Assignment of Revenues and Agreement...........................17
Section 4.6. Bond Insurance Policy; Liquidity Facility; Cancellation........17
Section 4.7. Company's Option to Elect Rate Period; Changes in
Auction Date and Length of Auction Periods....................18
Section 4.8. Company's Obligation to Purchase Bonds.........................18
ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS............................19
Section 5.1. Right of Inspection............................................19
Section 5.2. Maintenance....................................................19
Section 5.3. Removal of Portions of the Project Facilities..................19
Section 5.4. Operation of Project Facilities................................19
Section 5.5. Insurance......................................................20
Section 5.6. Workers' Compensation Coverage.................................20
Section 5.7. Damage; Destruction and Eminent Domain.........................20
Section 5.8. Company to Maintain its Corporate Existence; Conditions
Under Which Exceptions Permitted.............................20
Section 5.9. Indemnification................................................21
Section 5.10. Company Not to Adversely Affect Exclusion of Interest on
Bonds From Gross Income For Federal Income Tax Purposes..... 23
Section 5.11. Ownership of Projects; Use of Projects.........................23
Section 5.12. Assignment by Company..........................................23
ARTICLE VI. REDEMPTION.....................................................24
Section 6.1. Optional Redemption............................................24
Section 6.2. Extraordinary Optional Redemption..............................24
Section 6.3. Mandatory Redemption...........................................26
Section 6.4. Notice of Redemption...........................................26
Section 6.5. Actions by Issuer..............................................26
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES.................................27
Section 7.1. Events of Default..............................................27
Section 7.2. Remedies on Default............................................28
Section 7.3. No Remedy Exclusive............................................28
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses..................29
Section 7.5. No Waiver......................................................29
Section 7.6. Notice of Default..............................................29
ARTICLE VIII. MISCELLANEOUS..................................................30
Section 8.1. Term of Agreement..............................................30
Section 8.2. Amounts Remaining in Funds.....................................30
Section 8.3. Notices........................................................30
Section 8.4. Extent of Covenants of the Issuer; No Personal Liability.......30
Section 8.5. Binding Effect.................................................31
Section 8.6. Amendments and Supplements.....................................31
Section 8.7. Continuing Disclosure..........................................31
Section 8.8. Execution Counterparts.........................................31
Section 8.9. Severability...................................................31
Section 8.10. Governing Law..................................................31
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of December 1, 2004 between
the INDIANA DEVELOPMENT FINANCE AUTHORITY (the "Issuer"), a body politic and
corporate, not a state agency but an independent instrumentality of the State of
Indiana (the "State"), 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.
WHEREAS, Indiana Code 4-4-10.9 and -11, as supplemented and amended
(collectively, the "Act"), authorizes and empowers the Issuer to issue revenue
bonds and to lend the proceeds therefrom to a user or developer for the purpose
of financing the cost of acquisition, construction, or installation of
industrial development projects, and vests the Issuer with powers that may be
necessary to enable it to accomplish such purposes; and
WHEREAS, the Projects (as hereinafter defined) to be undertaken by the
Company will be of the character and will accomplish the purposes provided by
the Act, will promote opportunities for the abatement, reduction or prevention
of pollution and the removal or treatment of substances in materials being
processed that otherwise would cause pollution when used, will not have an
adverse competitive effect on similar facilities constructed or operating in or
near Xxxxx, Vermillion, Knox, Vigo and Xxxxxx Counties in the State of Indiana,
will create opportunities for gainful employment and will be to the benefit of
the health, safety, morals and general welfare of the citizens of Xxxxx,
Vermillion, Knox, Vigo and Xxxxxx Counties and the State; and
WHEREAS, the Issuer has prepared a report describing the proposed
industrial development projects, estimating the number and expense of public
works or services that would be made necessary or desirable, estimating the
total cost of the proposed industrial development projects, estimating the
number of jobs to be created by the projects and the resulting additional
payroll and describing the industrial development projects and how they will
xxxxx, reduce, or prevent pollution, and has submitted such report to the
executive director or chairman of the planning commission of the county in which
each industrial development project is located; and
WHEREAS, no written comments have been received from the executive director
or chairman of such plan commissions; and
WHEREAS, on November 16, 2004, the Issuer adopted a resolution finding that
the Projects and the proposed financing thereof will be of benefit to the
health, safety, morals, and general welfare of the citizens of Xxxxx,
Vermillion, Knox, Vigo and Xxxxxx Counties and the State, and complies with the
purposes and provisions of the Act after giving notice in accordance with the
Act and the Internal Revenue Code of 1986, as amended, and after the Issuer held
a public hearing on November 16, 2004, with regard to the proposed financing,
and having received no adverse comments about the Projects or the proposed
financing at the public hearing; and
WHEREAS, the Issuer intends to issue its Environmental Revenue Bonds,
Series 2004B (PSI Energy, Inc. Projects) in the aggregate principal amount of
Seventy-Seven One Hundred Twenty-Five Thousand Million Dollars ($77,125,000)
(the "Bonds") pursuant to the Trust Indenture dated as of December 1, 2004 (the
"Indenture"), between the Issuer and Deutsche Bank National Trust Company, as
trustee (the "Trustee"), in order to obtain funds to loan to the Company
pursuant to this Loan Agreement, between the Issuer and the Company in order to
provide funds for (i) financing a portion of the costs of the acquisition,
construction and installation of the Projects and (ii) paying various costs
incidental to such financing, including costs of issuance; and
WHEREAS, this Loan Agreement provides for the repayment by the Company of
the loan of the proceeds of the Bonds and further provides for such loan to be
secured by the lien and security interest provided for in this Loan Agreement;
and
WHEREAS, pursuant to the Indenture, the Issuer will assign certain of its
rights under this Loan Agreement as security for the Bonds which are payable
solely out of the payments to be made by the Company under this Loan Agreement
and the security interests granted thereby, except to the extent paid out of
Bond proceeds and proceeds of condemnation and insurance; and
WHEREAS, the execution and delivery of this Loan Agreement and the
Indenture and the issuance of the Bonds thereunder have been in all respects
duly and validly authorized by a resolution duly passed and approved by the
Issuer.
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 1.1. Use of Defined Terms. In addition to the words and terms defined
elsewhere in this Agreement, the Indenture 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 1.2. Definitions. As used herein:
"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 out-of-pocket expenses and advances payable
to the Trustee, the Registrar, the Remarketing Agent, the Broker-Dealer,
the Auction Agent, any Paying Agent and any Authenticating Agent.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Bond Insurer" means XL Capital Assurance Inc. an insurance company
incorporated under the laws of the State of New York.
"Bond Insurance Policy" means the insurance policy relating to the
Bonds issued by the Bond Insurer.
"Completion Date" means the date of completion of the Projects as set
forth in the certificate to be furnished by the Company pursuant to Section
3.6 hereof.
"Construction Period" means the period between the beginning of the
acquisition, construction, installation, equipping and improvement of the
Projects and the Completion Date.
"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.
"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 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
Projects; shortages of labor, materials, supplies or transportation;
or
(ii) any cause, circumstance or event not reasonably within the control of
the Company.
"Generating Stations" means, collectively, the generating stations
described in Exhibit A hereto.
"IDEM" means the Department of Environmental Management of the State
and any successor body, agency, commission or department.
"Indenture" means the Trust Indenture related to the Bonds, dated as
of the same date as this Agreement, between the Issuer and the Trustee, as
amended or supplemented from time to time.
"Insurance Agreement" means the Insurance Agreement between the
Company and the Bond Insurer as amended or supplemented from time to time.
"Interest Rate for Advances" means the interest rate per year payable
on the Bonds.
"Investment Grade Rating" means a long-term debt rating by a Rating
Agency that is included in one of the four highest debt rating categories
of the Rating Agency, provided that such rating categories shall mean
generic categories and without regard to or other qualifications of ratings
within each such generic rating category such as "+", "-", "1", "2" or "3".
"Issuance Costs" means all costs incurred in connection with the
issuance and delivery of the Bonds that constitute issuance costs within
the meaning of Section 147(g) of the Code.
"Liquidity Facility" means a liquidity facility 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.
"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.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Treasurer
(c) As to the Trustee: Deutsche Bank National Trust Company
000 Xxxxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 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
"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 which constitute "solid waste
disposal facilities" as described in Section 142(a)(6) of the Code.
"Projects" or "Project Facilities" means the real, personal or real
and personal property, including undivided or other interests therein,
identified in the Project Descriptions, financed with the proceeds of the
Bonds, all of which constitute "solid waste disposal facilities" under
Section 142(a)(6) of the Code.
"Project Costs" means the costs of the Projects specified in Section
3.4 hereof.
"Project Descriptions" means the descriptions of the Project
Facilities attached hereto as Exhibit A, as the same may be amended in
accordance with this Agreement.
"Project Purposes" means the purposes of Pollution Control Facilities
and related facilities as described in the Act and as particularly
described in Exhibit A hereto.
"Project Sites" means the sites of the Generating Stations.
"Revenues" means (a) the Loan Payments, (b) all other moneys received
or to be received by the Issuer (excluding any fees paid to the Issuer and
all Unassigned Issuer Rights) 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 Project 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.
"State" means the State of Indiana.
"Trustee" means Deutsche Bank National Trust Company, a banking
corporation duly organized and validly existing under the laws of the
United States of America and duly authorized to exercise corporate trust
powers in 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 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.
Section 1.3. 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, the Auction Agent, an Authenticating
Agent, a Paying Agent, the Bond Insurer, 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 1.4. 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 2.1. Representations of the Issuer. The Issuer represents that: (a) it
is a body politic and corporate, not a state agency but an independent
instrumentality of the State of Indiana, 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 public body; and (g) following reasonable notice,
a public hearing was held on November 16, 2004 with respect to the issuance of
the Bonds as required by Section 147 of the Code.
Section 2.2. No Warranty by Issuer of Condition or Suitability of the Projects.
The Issuer makes no warranty, either express or implied, as to the suitability
or utilization of the Projects 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 2.3. 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 the valid and legally binding
obligations of the Company, enforceable in accordance with their
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 Projects to be acquired, constructed, equipped, installed and
improved at the Project Sites, as provided under this Agreement,
constitute Pollution Control Facilities under the Act, are consistent
with and will further the purposes of the Act and will be located
entirely within the State. The Company will cause the Projects to be
operated and maintained in such manner as to conform to all
applicable, if any, 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 each portion of the Projects, which permits,
variances and orders have not been withdrawn or otherwise suspended,
and to be consistent with the Act;
(e) It is expected that the Projects will be utilized as Pollution Control
Facilities under the Act commencing promptly as portions thereof
become available for utilization, but in any event on or before the
Completion Date;
(f) It presently intends to use or operate or cause to be used or operated
the Projects 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 Projects will not be so operated. The Company does not
presently intend to sell or otherwise dispose of the Projects or any
portion thereof
(g) At least 95% of the net proceeds (as defined in Section 150 of the
Code), of the Bonds will be used to provide land or property of a
character subject to the allowance for depreciation for purposes of
Section 167 of the Code. The Company will not request or authorize any
disbursement pursuant to Section 3.4 hereof, which, if paid, would
result in less than 95% of such net proceeds being so used. The
Issuance Costs of the Bonds financed with the proceeds of the Bonds
will not exceed 2% of the proceeds of the Bonds (within the meaning of
Section 147(g) of the Code). None of the proceeds of the Bonds will be
used to provide working capital.
(h) No portion of the Projects have been acquired and placed in operation
at substantially the level for which it was designed for more than one
year prior to the date of delivery of the Bonds.
(i) In accordance with Section 147(b) of the Code, the weighted average
maturity of the Bonds does not exceed 120% of the weighted average
reasonably expected economic life of the facilities being financed by
the Bonds.
(j) None of the proceeds of the Bonds will be used to provide any
airplane; skybox or other private luxury box; 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;
(k) The Projects have been and will be used wholly to control pollution
and dispose of solid waste and sewage and was designed for no
significant purpose other than pollution control and disposal of solid
waste and sewage, and the Projects were 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 Projects which are Pollution Control Facilities, in the
recovery of by-products of any substantial value.
(l) Less than 25% of the net proceeds of the Bonds will be used directly
or indirectly to acquire land or any interest therein, and none of
such land is being or will be used for farming purposes; no portion of
the net proceeds of the Bonds will be used to acquire existing
property or any interest therein unless the first use of such property
or interest therein is pursuant to such acquisition;
(m) 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.
(n) The Bonds are not and will not be "federally guaranteed" within the
meaning of Section 149(b) of the Code.
(o) 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.
(p) At least 95% of the proceeds of the Bonds will be used to provide
"solid waste disposal facilities" within the meaning of Section
142(a)(6) of the Code;
(q) 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 will be accurate and complete as of the date of issuance of the
Bonds; and
(r) The Project Facilities do not include any office except for offices
(i) located on the Project Sites 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 PROJECTS; ISSUANCE OF THE BONDS
Section 3.1. Acquisition, Construction and Installation. The Company represents
and agrees that it (a) has caused or will cause the Projects to be acquired,
constructed and installed on the Project Sites in accordance with the Project
Descriptions and in conformance with all applicable, valid and enforceable (i)
zoning, planning, building, environmental and other similar regulations of all
governmental authorities having jurisdiction over the Projects and (ii) permits,
variances and orders issued in respect of the Projects by IDEM, noncompliance
with which would have a material adverse effect on the Company's ability to
operate and maintain the Projects or to perform its obligations hereunder,
provided that the Company reserves the right to contest in good faith any such
regulations, permits, variances or orders, (b) will use its reasonable efforts
to cause the acquisition, construction and installation of other facilities and
real and personal property deemed necessary in connection with the Projects to
the end that the Projects will fulfill the Project Purposes, (c) will pay all
fees, costs and expenses incurred in such acquisition, construction and
installation and (d) will use its reasonable efforts to ask, demand, xxx for,
xxxx, recover and receive all such sums of money, debts and other demands
whatsoever which may be due, owing and payable under the terms of any contract,
order, receipt, writing and instruction in connection with the acquisition,
construction and installation of the Projects, and to enforce the provisions of
any contract, agreement, obligation, bond or other performance security with
respect thereto; provided that in all instances the Company shall retain the
option of settlement of any dispute. Any amounts received in connection with
actions taken under clause (d) of the preceding sentence, after deduction of
expenses incurred in such recovery, prior to the Completion Date and full
disposition of the Project Fund in accordance with this Agreement and the
Indenture, shall be paid into the Project Fund.
It is understood that the Projects are those of the Company and any
contracts made by the Company with respect thereto, whether acquisition
contracts, installation contracts or otherwise, or any work to be done by
the Company on the Projects are made or done by the Company on its own
behalf and not as agent or contractor for the Issuer.
Section 3.2. Project Descriptions. The Project Descriptions may be changed from
time to time by, or with the consent of, the Company provided that any such
change shall not adversely affect the exclusion of interest on the Bonds from
gross income for federal income tax purposes.
Section 3.3. Issuance of the Bonds; Application of Proceeds. To provide funds to
make the Loan to the Company to assist the Company in the financing of a portion
of the costs of the Projects, 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, for the benefit of the Issuer and each Bondholder, shall do and perform
all acts and things required or contemplated in the Indenture to be done or
performed by the Company.
The proceeds from the sale of the Bonds (other than any accrued
interest) shall be loaned to the Company to assist the Company in financing
a portion of the costs of the Projects. Those proceeds shall be deposited
in the Project Fund. Any accrued interest shall be deposited in the Bond
Fund. Pending disbursement pursuant to Section 3.4 hereof, the proceeds so
deposited in the Project Fund, together with any investment earnings
thereon, shall constitute a part of the Revenues assigned by the Issuer to
the payment of Bond Service Charges as provided in the Indenture.
Section 3.4. Disbursements from the Project Fund. Disbursements from the Project
Fund shall be made only to reimburse or pay the Company, or any Person
designated by the Company, for the following Project Costs:
(a) Costs incurred directly or indirectly for or in connection with the
acquisition, construction, equipping, installation or improvement of
the Projects, including but not limited to those costs incurred for
preliminary planning and studies, architectural, legal, engineering
and supervisory services, labor, services, materials, acquisition,
construction and installation, recording of documents and title work
relating to the Project Sites.
(b) Premiums attributable to all insurance required to be taken out and
maintained during the Construction Period with respect to the Projects
and the premium on each surety bond, if any, required with respect to
work on the Projects.
(c) Taxes, assessments, interest on the Bonds and other charges in respect
of the Projects that may become due and payable during the
Construction Period for the Projects.
(d) Costs incurred directly or indirectly in seeking to enforce any remedy
against any contractor or subcontractor in respect of any default
under any contract relating to the Projects.
(e) Financial, legal, accounting, appraisal, printing and engraving fees,
charges and expenses, title insurance premiums, if any, and all other
such fees, charges and expenses incurred in connection with the
authorization, sale, issuance and delivery of the Bonds and the
preparation and delivery of the Agreement, the Indenture and other
related documents.
(f) Fees and expenses of the Trustee, Authenticating Agent, Paying Agent
and Registrar (as such terms are defined in the Indenture), including
reasonable counsel fees and expenses, properly incurred under the
Indenture that may become due and payable during the Construction
Period, including the initial or acceptance fee of the Trustee.
(g) Any other incidental and necessary costs including without limitation
any expenses, fees and charges relating to the acquisition,
construction or installation of the Projects.
(h) Payments made to the Rebate Fund.
(i) Any other expense permissible, in the opinion of Bond Counsel, under
the Act.
Any disbursements from the Project Fund for the payment of Project
Costs shall be made by the Trustee only upon the written order of the
Authorized Company Representative. Each such written order shall be in the
form of the disbursement request attached hereto as Exhibit B and shall be
consecutively numbered. In the case of any contract providing for the
retention of a portion of the contract price, there shall be paid initially
from the Project Fund only the net amount remaining after deduction of any
such portion, and when the amount of any such retention is due and payable,
then such retention may be paid from the Project Fund.
In addition, the Company shall not request or authorize any
disbursements from the Project Fund prior to the Completion Date for a
purpose or function other than to provide solid waste disposal facilities
within the meaning of Section 142(a)(6) of the Code, unless such
disbursement would not result in more than 5% of the net proceeds of the
Bonds (including those amounts disbursed pursuant to this Section 3.4)
being used other than to provide solid waste disposal facilities (treating
Issuance Costs so paid as being used other than to provide solid waste
disposal facilities), unless in connection with any such disbursement
request the Company provides the Trustee with an opinion of Bond Counsel or
ruling of the Internal Revenue Service to the effect that such disbursement
will not cause the interest on the Bonds to be included in the gross income
of the Holders for federal income tax purposes.
Receipt of a disbursement request, in the form of the disbursement
request attached hereto as Exhibit B, shall be full authorization for the
Trustee to make the disbursements requested thereby, and the Trustee shall
be entitled to rely without further inquiry on, and shall have no duty to
check, verify or investigate, the statements and certifications made
therein or included therewith.
Any moneys in the Project Fund remaining after the Completion Date and
payment, or provision for payment, in full of the Project Costs at the
direction of the Authorized Company Representative promptly shall be (a)
used to acquire, construct or install such additional real and personal
property comprising Pollution Control Facilities as defined in the Act for
use in connection with the Projects as is designated by the Authorized
Company Representative and the acquisition, construction, equipment,
installation and improvement of which will be such as is permitted under
the Act, (b) used for the purchase of Bonds in the open market for the
purpose of cancellation at prices not exceeding the fair market value
thereof plus accrued interest to the date of payment therefor, (c) paid
into the Bond Fund to be applied to the payment of Bond Service Charges on
the Bonds or the redemption of the Bonds, or (d) used for a combination of
the foregoing as is provided in that direction or for any other purposes as
are or may be permitted under the Act; provided that, in all such cases,
(A) those moneys shall be so used or applied only to the extent that such
use or application will not, in the opinion of Bond Counsel or under a
ruling of the Internal Revenue Service, adversely affect the exclusion of
the interest on the Bonds from the gross income of the Holders thereof and
(B) any money remaining in the Project Fund following completion of the
Projects shall be invested in accordance with the Code in such manner as
not to adversely affect the exclusion of the interest on the Bonds from the
gross income of the Holders thereof.
Section 3.5. Company Required to Pay Costs in Event Project Fund Insufficient.
If moneys in the Project Fund are not sufficient to pay all Project Costs, the
Company, nonetheless, will complete the Projects or cause the Projects to be
completed, in order to fulfill the Project Purposes and shall pay all such
additional Project Costs from its own funds. The Company shall not be entitled
to any reimbursement for any such additional Project Costs from the Issuer, the
Trustee or the Holders of any of the Bonds, nor shall it be entitled to any
abatement, diminution or postponement of the Loan Payments. The Issuer does not
make any representation that the moneys which will be paid into the Project Fund
and which under the provisions of this Agreement will be available for payment
of Project Costs, will be sufficient to pay all the costs which will be incurred
in that connection. The Company agrees that if after exhaustion of the moneys in
the Project Fund, the Company should pay pursuant hereto any portion of the
costs listed in Section 3.4 hereof, it shall not be entitled to any
reimbursement therefor from the State, the Issuer, the Trustee or the Holders of
any of the Bonds.
Section 3.6. Completion Date. The Company shall notify the Issuer and the
Trustee of the Completion Date by a certificate signed by the Authorized Company
Representative stating:
(a) the date on which the Projects were substantially completed and all
other facilities necessary in connection with the Projects have been
acquired, constructed and installed;
(b) that the acquisition, construction and installation of the Projects
and such other facilities have been accomplished in such a manner as
to conform with all applicable, legal and valid zoning, planning,
building, environmental and other similar governmental regulations, so
as not to have a material adverse effect on the Company's ability to
operate the Projects for the Project Purposes and perform its
obligations hereunder;
(c) that, except as provided in clause (d) of this Section 3.6, all costs
of that acquisition and installation then and theretofore due and
payable have been paid; and
(d) the amount which the Trustee shall retain in the Project Fund for the
payment of Project Costs not yet due or for liabilities which the
Company is contesting or which otherwise should be retained and the
reasons such amount should be retained.
That certificate may state that it is given without prejudice to any rights
against third parties which then exist or subsequently may come into being. The
Authorized Company Representative shall include with that certificate a
statement describing the items of personal property comprising a part of the
Projects. The certificate shall be delivered as promptly as practicable after
the occurrence of the events and conditions referred to in clauses (a) through
(d) of this Section.
Section 3.7. 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 Project 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 Company 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,
solely 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 3.8. Agreement as to Ownership of Projects. The Issuer agrees that it
shall not have any interest in, title to or ownership of the Projects or the
Project Sites.
Section 3.9. Use of Projects. The Issuer does hereby covenant and agree that it
will not take any action, or cause any action to be taken, during the term of
this Agreement, other than pursuant to Article VII of this Agreement or Article
VII of the Indenture, to interfere with the Company's ownership of the Projects
or to prevent the Company from having possession, custody, use and enjoyment of
the Projects, except such action as is requested by the Trustee in enforcing any
remedies available to it under this Agreement or the Indenture.
Section 3.10. Rebate Fund. To the extent required by Section 5.09 of the
Indenture, within five days after the end of the fifth Bond Year 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
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 5.09 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; CREDIT FACILITY
Section 4.1. 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, under all
circumstances and without reduction for any reason, 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 the Bond Insurer to the Trustee in respect
of the principal of, premium, if any, or interest on the Bonds when due
pursuant to the Bond Insurance Policy, provided, that the Bond Insurer has
been reimbursed for such payments in accordance with the terms of the
Insurance Agreement.
Except for such interest of the Company as may hereafter arise
pursuant to Section 8.2 hereof or Sections 5.07 or 5.08 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 4.2. Additional Payments. The Company shall pay to the Issuer, as
Additional Payments hereunder, any and all reasonable 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, the Auction 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 Auction Agent, 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 as provided herein 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 4.3. 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 4.4. Obligations Unconditional. The obligations of the Company to make
Loan Payments, Additional Payments and any payments required of the Company
under Section 5.09 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, the Auction Agent, the Paying Agent or any other Person.
Section 4.5. 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, 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. The Company hereby agrees and
consents to those assignments and that grant of a security interest.
Section 4.6. Bond Insurance Policy; Liquidity Facility; Cancellation.
(a) The Company agrees to support the payment of the principal of and
interest on the Bonds by causing the Bond Insurance Policy to be
delivered to the Trustee on the date of the delivery of the Bonds.
(b) The Company may provide for the delivery of a Liquidity Facility.
(c) The Company may cancel any Liquidity Facility then in effect at such
time and direct the Trustee in writing to surrender such Liquidity
Facility to the Liquidity 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
Liquidity Facility.
Section 4.7. Company's Option to Elect Rate Period; Changes in Auction Date and
Length of Auction Periods. 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 or to return to the Auction 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. The Company shall also
have the option to direct the change of Auction Dates and/or the length of
Auction Rate Periods (as such terms are defined in the Indenture) in accordance
with the Indenture. To exercise such options, the Company shall give the written
notice required by the Indenture.
Section 4.8. 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 a Liquidity Facility, if any, 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 5.1. 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
Sites to examine and inspect the Projects.
Section 5.2. 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 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 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 5.3. 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. 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. 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.
Section 5.4. 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 5.5. 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 (including self-insurance generally consistent with
industry practice), 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 5.6. 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 5.7. 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 and as shall not impair the character or
significance of the Project Facilities as furthering the purposes of the Act.
Section 5.8. 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 5.9. Indemnification.
(a) The Company releases the Issuer from, agrees that the Issuer and the
State shall not be liable for, and shall indemnify, defend and hold
harmless the Issuer and the State from and against all liabilities,
claims, costs, loss, penalty, tax and expenses, including attorneys
fees and expenses of any nature imposed upon, incurred or asserted
against the Issuer on account of: (i) the acceptance or administration
of the Indenture by the Trustee or the performance of the Issuer's
duties thereunder, except with respect to liability from such
Trustee's gross negligence or willful misconduct in connection with
such action taken; (ii) 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 acquisition, construction, equipping,
installation, maintenance, operation or use, non-use, condition or
occupancy of the Projects or a part thereof; (iii) any breach or
default on the part of the Company in the performance of any covenant
or agreement of the Company under this Loan Agreement, the Bond
Purchase Agreement or any contract or other document related to the
Projects or a part thereof, or arising from any act or failure to act
or misrepresentation by the Company, or any of the Company's agents,
contractors, servants, employees or licensees; (iv) violation of any
law, ordinance, or regulation arising out of the ownership, occupancy,
or use of the Projects or a part thereof; (v) undertaking the Projects
or the failure to undertake the Projects; (vi) any act, omitted act,
or misrepresentation by the Issuer in connection with or in the
performance of any obligation related to the issuance, sale, or
delivery of (or failure to issue, sell, or deliver) the Bonds under
this Loan Agreement or the Indenture, or any other agreement executed
by or on behalf of the Issuer (provided that nothing in this clause
should be construed to indemnify or release the Issuer from any
liability which it would otherwise have had arising from the
intentional misrepresentation or willful misconduct on the part of the
Issuer); (vii) the authorization, issuance, failure to issue, sale,
remarketing, trading, redemption or servicing of the Bonds, and the
provision of any information or certification furnished in connection
therewith concerning the Bonds, the Projects or the Company including,
without limitation, the Official Statement (as defined in the Bond
Purchase Agreement), any information furnished by the Company for, and
included in, or used as a basis for preparation of, any
certifications, information statements or reports furnished by the
Issuer (including, without limitation, IRS Form 8038), and any other
information or certification obtained from the Company to assure the
exclusion of the interest on the Bonds from gross income of the
holders thereof for federal income tax purposes; (viii) the Company's
failure to comply with, any requirement of this Loan Agreement or the
Code pertaining to such exclusion of that interest, including the
covenants in Section 5.10 hereof and in the Tax Certificate; and (ix)
any claim, action or proceeding brought with respect to the matters
set forth in (i), (ii), (iii), (iv), (v), (vi), (vii) or (viii) above,
except as limited or excluded based upon gross negligence, willful
misconduct or intentional misrepresentation.
The Company agrees to indemnify the Trustee, the Paying Agent, the
Remarketing Agent, the Auction 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 gross 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 Loan 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 Loan 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 the Company's consent.
The indemnification set forth above is intended to and shall include
the release and indemnification of all affected officials, directors,
members, officers, employees, attorneys, agents, successors and assigns of
the Issuer, the Trustee, the Paying Agent, the Remarketing Agent, the
Auction Agent and the Registrar, respectively, past, present or future.
Each release and/or indemnification is intended to and shall be enforceable
by the Issuer and the Trustee, the Paying Agent, the Remarketing Agent, the
Auction Agent and the Registrar, respectively, to the full extent permitted
by law.
(b) Notwithstanding the foregoing, the Company shall be entitled to pursue
its remedies against the Issuer for damages to the Company resulting
directly from personal injury or property damage caused by the gross
negligence or willful misconduct of the Issuer.
(c) No covenant or agreement contained in the Bonds or this Agreement
shall be deemed to be a covenant or agreement of any member of the
Issuer or of any officer or employee of the Issuer in his or her
individual capacity, and neither the Issuer nor any officer or
employee of the Issuer executing the Bonds shall be liable personally
on the Bonds or be subject to any personal liability or accountability
by reason of the issuance of the Bonds.
(d) The indemnity set forth herein shall be in addition to any other
obligations of the Company to the holder or amounts due hereunder to
the Issuer or at common law or otherwise, and shall survive any
termination of this Agreement, and the payment of all obligations
hereunder.
Section 5.10. 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 5.11. Ownership of Projects; Use of Projects. The Issuer agrees that it
does not have and shall not have any interest in, title to or ownership of the
Projects or the Project Site. The Issuer does hereby covenant and agree that it
will not take any action, or cause any action to be taken on its behalf, during
the term of this Agreement, other than pursuant to Article VII of this Agreement
or Article VII of the Indenture, to interfere with the Company's ownership
interest in the Projects or to prevent the Company from having possession,
custody, use and enjoyment of the Projects, except such action as is requested
by the Trustee in enforcing any remedies available to it under this Agreement or
the Indenture.
Section 5.12. Assignment by Company. Notwithstanding any other provision of this
Loan Agreement, this Agreement may be assigned in whole or in part by the
Company and the Projects may be sold or conveyed by the Company without the
necessity of obtaining the consent of either the Issuer or the Trustee and after
providing written notice to the Issuer but, subject, however, to each of the
following conditions:
(a) The Company must provide the Trustee and the Remarketing Agent with an
Opinion of Bond Counsel that such action will not affect the exclusion
of the interest on the Bonds for federal income tax purposes.
(b) 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.
(c) Any assignment from the Company shall not materially impair
fulfillment of the Project Purposes to be accomplished by operation of
the Projects as herein provided.
(End of Article V)
ARTICLE VI.
REDEMPTION
Section 6.1. 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 6.2. 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 following allocable percentage figures for each
Project Facility: 7% for the Xxxxxxxxx Generating Station, 48% for the Xxxxxx
Generating Station, 1%, for the Wabash River Generating Station, 1% for the
Edwardsport Generating Station, and 43% for the Cayuga Generating Station.
(a) 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 Station 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 Station 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 Station which they
serve shall have been taken under the exercise of the power of eminent
domain to such an extent that (1) such Project Facilities or such
Generating Station 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 Station
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 Station 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 Station.
(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 Station 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 Station 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 Station 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 Station for a period of six consecutive months.
(g) The termination by the Company of operations at the Generating Station
which is 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 6.3. 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 Section 4.01(b) of the
Indenture.
Section 6.4. 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, 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 6.5. Actions by Issuer. Subject to Section 4.2 hereof, 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 7.1. 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;
(c) The receipt by the Trustee of written notice from the Bond Insurer
that an event of default has occurred and is continuing under the
Insurance Agreement; and
(d) 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
(e) 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 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 7.2. 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 Projects; 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 5.08 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 7.3. 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 7.4. 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 7.5. 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 7.6. Notice of Default. The Company shall notify the Trustee 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 8.1. 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 8.2. 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 5.07 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 8.3. 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, the Trustee or the
Bond Insurer shall also be given to the others. The Company, the Issuer, the
Trustee and any Credit Facility Issuer, by notice given hereunder, may designate
any further or different addresses to which subsequent notices, certificates,
requests or other communications shall be sent.
Section 8.4. 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 8.5. 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, 5.12
or 5.13 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 8.6. 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 8.7. Continuing Disclosure. The Issuer hereby .acknowledges the entry by
the Company into the Continuing Disclosure Agreement under which the Company has
assumed certain obligations for the benefit of the Holders of the Bonds. The
Company agrees to perform its obligations under the Continuing Disclosure
Agreement. The Company acknowledges and agrees that the Issuer is not an
"obligated person" (as defined in the Continuing Disclosure Agreement) with
respect to the Bonds and represents that the Company is the only obligated
person with respect to the Bonds. Notwithstanding any other provision of this
Agreement, any failure by the Company to comply with any provision of the
Continuing Disclosure Agreement shall not be a failure or a default, or an Event
of Default, under this Agreement or the Indenture.
Section 8.8. 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 8.9. 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 8.10. 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: ______________________________________
Xxxxxxx X. Xxxxxx, Designee of
Lieutenant Governor's Office
Attest:
________________________________
Xxxxxxxx X. Xxxxx, Executive Director
[Issuer's Signature Page to Series 2004B Loan Agreement]
PSI ENERGY, INC.
By: __________________________________________
Xxxxx X. Xxxxxxxx
Treasurer
[Company's Signature Page to Series 2004B Loan Agreement]
EXHIBIT A
PROJECTS
Project 1
Miscellaneous improvements to and expansion of the waste handling facilities for
the Cayuga Generating Station used in the collection, transport, and storage,
handling and disposal of solid waste. Cayuga Station is located in Vermilion
County, Indiana.
Project 2
Miscellaneous improvements to and expansion of the ash handling and disposal
facilities for the Edwardsport Generating Station used in the collection,
transport, and disposal of bottom ash, pyrites, economizer ash, and precipitator
fly ash. Edwardsport Station is located in Xxxx County, Indiana.
Project 3
Miscellaneous improvements to and expansion of the ash handling and disposal
facilities for the Wabash River Generating Station used in the collection,
transport, and disposal of bottom ash, pyrites, economizer ash, and precipitator
fly ash. Wabash River Station is located in Vigo County, Indiana.
Project 4
Miscellaneous improvements to and expansion of the waste handling and disposal
facilities for the Xxxxxx Generating Station used in the collection, transport,
and disposal solid wastes as a result of scrubbing sulfur dioxide from the flue
gas stream. This facility also includes improvements to and expansion of
facilities used in the collection, transport, and disposal of bottom ash,
pyrites, economizer ash, and precipitator fly ash. Xxxxxx Station is located in
Xxxxxx County, Indiana.
Project 5
This facility covers the improvements to and expansion of the solid waste
disposal facilities for the Xxxxxx Generating Station Unit #3 as a result of
installation of a flue gas desulphurization system ("FGD System"). The removal
of sulfur dioxide from the flue gas stream creates a solid waste that is
collected, processed, transported, and stored on site in a waste disposal
landfill. Xxxxxx Station is located in Xxxxxx County, Indiana.
Projects 6 & 7
Improvements to and expansion of the solid waste disposal facilities at the
Cayuga Generating Station as a result of the installation of FGD Systems on both
Unit 1 and Unit 2, the purpose of which is the removal of sulfur dioxide from
the flue gas of each unit. The removal of sulfur dioxide from the flue gas
stream creates a solid waste that is collected, processed, transported, and
stored on site in a waste disposal landfill. In addition to the new FGD Systems,
a new landfill will be constructed to store the solid waste created by the FGD
Systems. Cayuga Station is located in Vermilion County, Indiana.
Project 8
Improvements to and expansion of the solid waste disposal facilities at the
Xxxxxxxxx Generating Station as a result of the installation of polishing bag
house systems (PBH Systems) on Xxxxx 0, 0, 0 & 0, xxx xxxxxxx of which is the
removal of fly ash from the flue gas stream of each unit. The removal of fly ash
creates a solid waste that is collected, transported, and stored on site in a
waste disposal landfill. In addition to the new PBH Systems, a new landfill will
be constructed to store the solid waste collected by the PBH Systems. Xxxxxxxxx
Station is located in Xxxxx County, Indiana.
Projects 9 & 10
Improvements to and expansion of the solid waste disposal facilities at the
Xxxxxx Generating Station as a result of installation of new FGD Systems on Unit
1 and Unit 2, the purpose of which is the removal of sulfur dioxide from the
flue gas of each unit. The removal of sulfur dioxide from the flue gas stream
creates a solid waste that is collected, processed, transported, and stored on
site in a waste disposal landfill. The solid waste will be transported to and
stored in a new landfill, currently under construction for the storage of all
the station's solid waste created by the FGD Systems. Xxxxxx Station is located
in Xxxxxx County, Indiana.
A-2
EXHIBIT B
FORM OF DISBURSEMENT REQUEST
STATEMENT NO. ___ REQUESTING DISBURSEMENT
OF FUNDS FROM PROJECT FUND PURSUANT TO
SECTION 3.4 OF THE LOAN AGREEMENT DATED AS
OF DECEMBER 1, 2004 BETWEEN THE INDIANA DEVELOPMENT
FINANCE AUTHORITY AND PSI ENERGY, INC.
Pursuant to Section 3.4 of the Loan Agreement (the "Agreement") between the
Indiana Development Finance Authority (the "Issuer") and PSI Energy, Inc. (the
"Company"), dated as of December 1, 2004, the undersigned Authorized Company
Representative hereby authorizes Deutsche Bank National Trust Company, as
trustee (the "Trustee"), as depository of the Project Fund created by the
Indenture (the "Indenture") by and between the Issuer and the Trustee, to pay to
the Company out of the moneys deposited in said Project Fund the aggregate sum
of $_______________ to pay the person(s) listed on Schedule I which may include
reimbursements to the Company, for the advances, payments and expenditures made
by it in connection with the items listed in Schedule I, which is incorporated
herein by reference.
The undersigned in connection with the foregoing request for disbursements
from said Project Fund hereby certifies that:
(a) Each item is properly payable out of the Project Fund in accordance
with the terms and conditions of the Agreement and none of such items
for which payment is requested has formed the basis for any payment
heretofore made from said Project Fund.
(b) Each item for which payment is requested hereunder is or was necessary
or appropriate in connection with the acquisition, construction,
equipping, installation or improvement of the Projects, as defined in
the Indenture and Agreement, or costs related thereto as permitted by
the Agreement.
(c) This document evidences the approval of the undersigned Authorized
Company Representative of each payment hereby authorized.
(d) Each item for which disbursement is requested hereunder, and the cost
for each item, is as described in the information statement filed by
the Issuer in connection with the issuance of the Bonds (as defined in
the Agreement), as required by Section 149(e) of the Code (as defined
in the Agreement); provided that if the foregoing statement is not
true, the average reasonably expected economic life of the facilities
which have been and will be paid for with moneys in the Project Fund
is not less than 5/6ths of the average maturity of the Bonds.
This _______ day of _______________, ____.
_____________________________
Authorized Company Representative
Schedule I
TO STATEMENT NO. _______ REQUESTING DISBURSEMENT OF FUNDS FROM PROJECT FUND
PURSUANT TO SECTION 3.4 OF THE LOAN AGREEMENT DATED AS OF DECEMBER 1, 2004,
BETWEEN THE INDIANA DEVELOPMENT FINANCE AUTHORITY AND PSI ENERGY, INC.
PAYEE AMOUNT PURPOSE
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