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OPERATING EQUIPMENT AGREEMENT
Dated as of July 1, 1996
between
CLOVER UNIT 2 GENERATING TRUST
and
OLD DOMINION ELECTRIC COOPERATIVE
CLOVER UNIT 2 GENERATING FACILITY
AND
COMMON FACILITIES
=======================================
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS OPERATING
EQUIPMENT AGREEMENT OF CLOVER UNIT 2 GENERATING TRUST HAVE BEEN ASSIGNED TO AND
ARE SUBJECT TO A FIRST PRIORITY SECURITY INTEREST IN FAVOR OF UTRECHT-AMERICA
FINANCE CO., AS AGENT AND LENDER UNDER THE LOAN AND SECURITY AGREEMENT, DATED AS
OF JULY 1, 1996. THIS OPERATING EQUIPMENT AGREEMENT HAS BEEN EXECUTED IN SEVERAL
COUNTERPARTS. ONLY THE ORIGINAL COUNTERPART CONTAINS THE RECEIPT THEREFOR
EXECUTED BY THE AGENT ON THE SIGNATURE PAGE THEREOF. SEE SECTION 24 FOR
INFORMATION CONCERNING THE RIGHTS OF THE HOLDERS OF THE VARIOUS COUNTERPARTS
HEREOF.
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................................. 2
SECTION 2. CONVEYANCE OF USE AND POSSESSION OF THE
EQUIPMENT INTEREST.......................................................................... 3
SECTION 3. TERM AND BASIC PAYMENTS..................................................................... 3
SECTION 3.1 TERM...................................................................... 3
SECTION 3.2 BASIC PAYMENTS............................................................ 3
SECTION 3.3 SUPPLEMENTAL PAYMENTS..................................................... 4
SECTION 3.4 ADJUSTMENT OF BASIC PAYMENTS.............................................. 4
SECTION 3.5 MANNER OF PAYMENTS........................................................ 6
SECTION 3.6 BUSINESS DAY.............................................................. 7
SECTION 3.7 AGREEMENT WITH RESPECT TO AMOUNTS PAYABLE UNDER
PAYMENT UNDERTAKING AGREEMENT............................................................... 7
SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT......................................... 7
SECTION 4.1 DISCLAIMER OF WARRANTIES.................................................. 7
SECTION 4.2 QUIET ENJOYMENT........................................................... 9
SECTION 5. RETURN OF EQUIPMENT INTEREST................................................................ 9
SECTION 5.1 RETURN.................................................................... 9
SECTION 5.2 CONDITION UPON RETURN..................................................... 9
SECTION 5.3 ENVIRONMENTAL REPORT...................................................... 13
SECTION 5.4 EXPENSES.................................................................. 14
SECTION 6. LIENS....................................................................................... 14
SECTION 7. MAINTENANCE; REPLACEMENTS OF COMPONENTS..................................................... 14
SECTION 7.1 MAINTENANCE............................................................... 14
SECTION 7.2 REPLACEMENT OF COMPONENTS................................................. 15
SECTION 8. MODIFICATIONS............................................................................... 15
SECTION 8.1 REQUIRED MODIFICATIONS.................................................... 15
SECTION 8.2 OPTIONAL MODIFICATIONS.................................................... 16
SECTION 8.3 TITLE TO MODIFICATIONS; SUBJECTION TO HEAD EQUIPMENT
AGREEMENT................................................................................... 16
SECTION 9. HELL OR HIGH WATER CLAUSE................................................................... 16
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TABLE OF CONTENTS, CONTINUED
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC......................................................... 17
SECTION 10.1 EVENTS OF LOSS............................................................ 17
SECTION 10.2 PAYMENT OF TERMINATION VALUE; TERMINATION OF
EQUIPMENT PAYMENTS.......................................................................... 18
SECTION 10.3 REPLACEMENT............................................................... 20
SECTION 10.4 EMINENT DOMAIN............................................................ 22
SECTION 11. INSURANCE................................................................................... 23
SECTION 12. INSPECTION.................................................................................. 26
SECTION 13. TERMINATION OPTION FOR BURDENSOME EVENTS.................................................... 26
SECTION 13.1 ELECTION TO TERMINATE..................................................... 26
SECTION 13.2 PROCEDURE FOR EXERCISE OF TERMINATION OPTION.............................. 27
SECTION 14. TERMINATION FOR OBSOLESCENCE................................................................ 28
SECTION 14.1 TERMINATION............................................................... 28
SECTION 14.2 SOLICITATION OF OFFERS.................................................... 28
SECTION 14.3 RIGHT OF FACILITY OWNER TO RETAIN THE EQUIPMENT
INTEREST.................................................................................... 28
SECTION 14.4 PROCEDURE FOR EXERCISE OF TERMINATION OPTION.............................. 29
SECTION 15. END OF TERM OPTIONS......................................................................... 30
SECTION 15.1 OLD DOMINION'S PURCHASE OPTION............................................ 30
SECTION 15.2 FACILITY OWNER'S PREEMPTIVE ELECTION...................................... 32
SECTION 15.3 OLD DOMINION'S EXERCISE OF SERVICE CONTRACT OPTION........................ 32
SECTION 15.4 USE OF PROCEEDS OF QUALIFYING SECURITY.................................... 35
SECTION 15.5 OBLIGATION TO PAY AMOUNT EQUAL TO PRINCIPAL AND
INTEREST ON LOAN CERTIFICATES UPON VIRGINIA POWER DEFAULT................................... 36
SECTION 16. EVENTS OF DEFAULT........................................................................... 36
SECTION 17. REMEDIES.................................................................................... 39
SECTION 17.1 REMEDIES FOR EVENT OF DEFAULT............................................. 39
SECTION 17.2 CUMULATIVE REMEDIES....................................................... 41
SECTION 17.3 NO DELAY OR OMISSION TO BE CONSTRUED AS WAIVER............................ 42
SECTION 18. OLD DOMINION TERMINATION OPTION FOR APPEAL OF
FERC ORDERS................................................................................. 42
SECTION 18.1 OLD DOMINION OPTION TO TERMINATE.......................................... 42
SECTION 18.2 PROCEDURE FOR EXERCISE OF TERMINATION OPTION.............................. 42
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TABLE OF CONTENTS, CONTINUED
SECTION 19. OLD DOMINION'S RIGHT TO SUBLEASE............................................................ 43
SECTION 20. FURTHER ASSURANCES.......................................................................... 44
SECTION 21. FACILITY OWNER'S RIGHT TO PERFORM........................................................... 44
SECTION 22. NOTICES..................................................................................... 45
SECTION 23. SECURITY INTEREST AND INVESTMENT OF SECURITY
FUNDS....................................................................................... 46
SECTION 24. SECURITY FOR FACILITY OWNER'S OBLIGATION TO THE
LENDERS................................................................... 46
SECTION 25. MISCELLANEOUS............................................................................... 47
SECTION 25.1 GOVERNING LAW............................................................. 47
SECTION 25.2 SEVERABILITY.............................................................. 47
SECTION 25.3 HEADINGS AND TABLE OF CONTENTS............................................ 47
SECTION 25.4 SUCCESSORS AND ASSIGNS.................................................... 47
SECTION 25.5 "TRUE LEASE".............................................................. 47
SECTION 25.6 IDENTIFICATION............................................................ 48
SECTION 25.7 AMENDMENTS AND WAIVERS.................................................... 48
SECTION 25.8 AGREEMENT REGARDING EQUIPMENT............................................. 48
SECTION 25.9 SURVIVAL.................................................................. 48
SECTION 25.10 COUNTERPARTS.............................................................. 49
SECTION 25.11 EFFECTIVENESS............................................................. 49
SECTION 25.12 LIMITATION OF LIABILITY................................................... 49
ATTACHMENTS TO OPERATING EQUIPMENT AGREEMENT:
Appendix A - Definitions.................................................................................A-1
Exhibit A-1 - Description of Unit 2 Equipment...........................................................A-1-1
Exhibit A-2 - Description of Common Facilities Equipment................................................A-2-1
Exhibit B - Power Sales Agreement Capacity and Energy Charges...........................................B-1
Schedule 1 - Basic Payments.............................................................................S1-1
Schedule 2 - Termination Values.........................................................................S2-1
Schedule 3 - Terms and Conditions of New Loan to be Issued
Upon Commencement of Service Contract Option...............................................S3-1
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OPERATING EQUIPMENT AGREEMENT
This OPERATING EQUIPMENT AGREEMENT, dated as of July 1, 1996 (this
"Operating Equipment Agreement"), between CLOVER UNIT 2 GENERATING TRUST, a
Delaware business trust created pursuant to the Trust Agreement, dated as of
July 1, 1996, between EPC Corporation and Wilmington Trust Company (the
"Facility Owner"), and OLD DOMINION ELECTRIC COOPERATIVE, a wholesale power
supply cooperative organized under the laws of the Commonwealth of Virginia
("Old Dominion").
WHEREAS, the Clover Real Estate is more particularly described in
Schedule 1 to the Ground Lease and Sublease and is comprised of the Unit 1 Site
described in Schedule 2 thereto, the Unit 2 Site described in Schedule 3
thereto, the Common Facilities Site described in Schedule 4 thereto, and certain
other property, each such Schedule 1, Schedule 2, Schedule 3 and Schedule 4
being attached to, and recorded in the Halifax Clerk's Office with, the Ground
Lease and Sublease as part thereof;
WHEREAS, a copy of the Clover Power Station Plat is marked Exhibit A
and is attached to, and recorded in the Halifax Clerk's Office with, the Ground
Lease and Sublease as a part thereof;
WHEREAS, Old Dominion and Virginia Power own the Clover Real Estate as
tenants-in-common;
WHEREAS, by the Clover Agreements, Old Dominion and Virginia Power
established their respective rights and obligations as tenants-in-common of the
Clover Real Estate and of all improvements thereafter to be constructed, and all
personal property thereafter to be situated, on the Clover Real Estate. Such
improvements and personal property held by Old Dominion and Virginia Power as
tenants-in-common include (a) the Unit 1 Foundation constructed on the Xxxx 0
Xxxx, (x) the Xxxx 0 Foundation constructed on the Unit 2 Site, (c) the Common
Facilities Foundation constructed on the Common Facilities Site, (d) the Unit 1
Equipment situated on the Unit 1 Site, (e) the Xxxx 0 Equipment situated on the
Unit 2 Site, and (f) the Common Facilities Equipment situated on the Common
Facilities Site;
WHEREAS, as tenants-in-common of such real and personal property, each
of Old Dominion and Virginia Power holds a 50% undivided interest in such real
and personal property, including the right to nonexclusive possession of all
such real and personal property, subject to (a) in the case of all such real and
personal property, the rights of the other to nonexclusive possession and the
terms and conditions of the Clover Agreements, (b) in the case of the Pollution
Control Assets, the rights, terms and conditions described above in clause (a)
and the rights of the Pollution Control Assets Lessor, and (c) in the case of
the Common Facilities, the Unit 1 Site, the Unit 1 Foundation and the Unit 1
Equipment, the rights, terms and conditions described above in clause (a) and
the rights of the Unit 1 Parties;
WHEREAS, by the Ground Lease and Sublease, Old Dominion has leased the
Ground Interest to the Facility Owner and the Facility Owner simultaneously has
subleased the Ground Interest back to Old Dominion upon the terms and conditions
of the Ground Lease and Sublease;
WHEREAS, Old Dominion has conveyed to the Facility Owner for a term of
years (a) the Foundation Interest by the Head Foundation Agreement and (b) the
Equipment Interest by the Head Equipment Agreement;
WHEREAS, by the Operating Foundation Agreement, the Facility Owner is
conveying use and possession of the Foundation Interest back to Old Dominion for
the Term which shall end prior to the expiration of the term of the Head
Foundation Agreement;
WHEREAS, by this Operating Equipment Agreement, the Facility Owner is
conveying use and possession of the Equipment Interest back to Old Dominion for
the Term which shall end prior to the expiration of the term of the Head
Equipment Agreement;
WHEREAS, although Old Dominion and the Facility Owner intend that the
Foundation Interest at all times and in all respects be and remain personal
property under Virginia law, they have recorded the Head Foundation Agreement,
and are recording the Operating Foundation Agreement, in the Halifax Clerk's
Office in order to satisfy the conditions of Section 55-96 of the Code of
Virginia 1950, as amended, in the event that the Foundation Interest is deemed
to be real estate or an interest in real estate for purposes of such Section
55-96; and
WHEREAS, the Unit 1 Parties and the Unit 2 Parties shall share equally
all of those rights, and shall be subject equally to having all of those
responsibilities undertaken, which are granted to or imposed upon Old Dominion
with respect to the Common Facilities Site, the Common Facilities Foundation and
the Common Facilities Equipment, as (a) tenant-in-common with Virginia Power of
such property and (b) a party to the Clover Agreements.
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used in this Operating Equipment Agreement and not
otherwise defined herein shall have the respective meanings set forth in
Appendix A hereto.
Where any provision in this Operating Equipment Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
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SECTION 2. CONVEYANCE OF USE AND POSSESSION OF THE EQUIPMENT
INTEREST.
The Facility Owner hereby conveys, simultaneously with the conveyance
of the Equipment Interest for a term of years from Old Dominion to the Facility
Owner pursuant to the Head Equipment Agreement, the use and possession of the
Equipment Interest to Old Dominion for the term described below and Old Dominion
hereby takes such interest in the Equipment Interest from the Facility Owner.
Old Dominion and the Facility Owner understand and agree that (a) this
conveyance of the use and possession of the Equipment Interest is subject to the
limitations identified in the definition thereof, (b) legal title to all assets
in the Equipment Interest constituting Retained Assets remains vested in Old
Dominion and Virginia Power as tenants-in-common, (c) all assets in the
Equipment Interest constituting Pollution Control Assets have been conveyed to
the Pollution Control Assets Lessor and leased back to Old Dominion pursuant to
the Pollution Control Assets Lease and that legal title to such Pollution
Control Assets remains vested in the Pollution Control Assets Lessor and
Virginia Power as tenants-in-common, and (d) this conveyance of the use and
possession of the Equipment Interest is subject and subordinate to the lien of
the Old Dominion Indenture (including any future amendments, supplements or
issuance of additional advances or indebtedness thereunder), Permitted
Encumbrances and the rights of Virginia Power under the Clover Agreements. The
Equipment Interest shall be subject to the terms of this Operating Equipment
Agreement from the date on which this Operating Equipment Agreement is executed
and delivered.
Descriptions of the Unit 2 Equipment and the Common Facilities
Equipment are set forth on Exhibits A-1 and A-2, respectively, to this Operating
Equipment Agreement. Descriptions of the Retained Assets and the Pollution
Control Assets are set forth on Exhibits A-3 and A-4, respectively, to this
Operating Equipment Agreement.
SECTION 3. TERM AND BASIC PAYMENTS
SECTION 3.1 TERM. The term of this Operating Equipment Agreement shall
commence on the Closing Date and shall terminate at 11:59 p.m. (New York City
time) on the Expiration Date, subject to earlier termination pursuant to Section
10, 13, 14, 17 or 18 hereof (the "Term").
SECTION 3.2 BASIC PAYMENTS. Old Dominion hereby agrees to pay to the
Facility Owner the Basic Payments for the use and possession of the Equipment
Interest for each Payment Period throughout the Basic Term in the amounts
payable in advance or in arrears or both, as the case may be, on each Payment
Date as indicated on Schedule 1 hereto under the caption "Advance Payments" in
the case of Payment Periods immediately following such Payment Date and/or
"Arrears Payments" in the case of Payment Periods ending on such Payment Date.
Each such Basic Payment shall be in the amount set forth opposite such Payment
Date on Schedule 1 hereto, in each case, subject to Section 3.4 hereof.
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SECTION 3.3 SUPPLEMENTAL PAYMENTS. Old Dominion also agrees to pay to
the Facility Owner, or to any other Person entitled thereto, any and all
Supplemental Payments, promptly as the same shall become due and owing, or where
no due date is specified, promptly after demand by the Person entitled thereto,
and in the event of any failure on the part of Old Dominion to pay any
Supplemental Payments, the Facility Owner shall have all rights, powers and
remedies provided for herein or by law or equity or otherwise for the failure to
pay Basic Payments. Old Dominion will also pay as Supplemental Payments (i) to
the extent permitted by Applicable Law, an amount equal to interest at the
applicable Overdue Rate on any part of any payment of Basic Payments not paid
when due for any period for which the same shall be overdue and on any
Supplemental Payments not paid when due (whether on demand or otherwise) for the
period from such due date until the same shall be paid. All Supplemental
Payments to be paid pursuant to this Section 3.3 shall be payable in the manner
set forth in Section 3.5.
SECTION 3.4 ADJUSTMENT OF BASIC PAYMENTS. (a) Old Dominion and the
Facility Owner agree that Basic Payments, Termination Values, Equity Exposure
Amounts and the Purchase Option Price shall be adjusted, either upwards or
downwards, to reflect (i) any Burdensome Tax Law Change, (ii) the principal
amount, amortization and interest rate on any Additional Loan Certificates
issued pursuant to Section 2.11 of the Loan Agreement to finance Modifications
to the Unit 2 Equipment or the Common Facilities Equipment, (iii) the principal
amount, amortization and interest rate on any Additional Loan Certificates
issued pursuant to Section 2.11 of the Loan Agreement in connection with a
refinancing of any Loan Certificates, (iv) the exercise by Old Dominion of its
option pursuant to Section 4(b)(1) of the Tax Indemnity Agreement to make
indemnity payments in the form of upward adjustments to Basic Payments, and (v)
Old Dominion's consummation of the transaction contemplated by Section 11 of the
Participation Agreement where the transaction adversely affects the status of
the Head Equipment Agreement or the Head Foundation Agreement as conveying
ownership for state or local income tax purposes in Virginia. Any adjustment
pursuant to clause (i), (iii), (iv) or (v) of the immediately preceding sentence
shall be coordinated with any comparable adjustment made pursuant to Section 3.4
of the Operating Foundation Agreement such that the aggregate adjustment shall
be apportioned between this Operating Equipment Agreement and the Operating
Foundation Agreement in the same ratio as Equipment Interest Cost bears to the
Foundation Interest Cost. Any adjustments pursuant to this Section 3.4 will be
calculated to preserve the Owner Participant's Net Economic Return; PROVIDED,
HOWEVER, that (a) to the extent consistent with preserving such Net Economic
Return, all adjustments shall minimize the present value to Old Dominion of the
Basic Payments or, at Old Dominion's election, the Basic Payments and the
Purchase Option Price and (b) all adjustments shall be consistent with the
conclusions of the Appraiser set forth in the Appraisal. Adjustments will be
made using the same method of computation and assumptions originally used (other
than those that have changed as the result of the event giving rise to the
adjustment) in the calculation of the Basic Payments and the Purchase Option
Price. The adjustments contemplated by this Section 3.4 will result in
corresponding adjustments to Termination Values. In addition, in connection with
any adjustment pursuant to this Section 3.4, the Equity Exposure Amounts shall
be increased by an increase in the Equity Portion of Basic Payments or the
Equity Portion of Termination Value. All Basic Payments adjustments shall be
consistent with Rev. Procs. 75-21 and 75-28 and section
4
467 of the Code (to the extent the Basic Payments complied with such section 467
on the Closing Date), including any final, proposed or temporary regulations or
other administrative announcements issued thereunder and in no event shall such
adjustment cause this Operating Equipment Agreement to become a "disqualified
leaseback or long-term agreement" within the meaning of section 467 of the Code
and any such regulations or announcements thereunder. Any adjustment made to the
Purchase Option Price may result in an increase or decrease in such Purchase
Option Price, but the Purchase Option Price shall not be subject to decrease
below the projected fair market value of the Equipment Interest on the
Expiration Date as set forth in the Appraisal.
(a) Each Basic Payment payable hereunder, whether or not adjusted in
accordance with this Section 3.4, when combined with the Foundation Basic
Payment payable under the Operating Foundation Agreement on such date, shall be
in an amount at least sufficient to pay in full principal and interest payable
on the Loan Certificates on each Payment Date. Termination Values (excluding the
Equity Portion of Termination Value) payable on any date under this Operating
Equipment Agreement and the initial installment of the Purchase Option Price,
whether or not adjusted in accordance with this Section 3.4, when combined with
Termination Values (excluding the Equity Portion of Termination Value) and the
initial installment of the Foundation Purchase Option Price payable under the
Operating Foundation Agreement on such date, shall, together with all other
Basic Payments and Foundation Basic Payments due and owing on such date,
exclusive of any portion thereof that is an Excepted Payment, be in an amount at
least sufficient to pay in full the principal of and accrued interest on the
Loan Certificates payable on such date.
(b) Any adjustment pursuant to this Section 3.4 shall initially be
computed by the Owner Participant. Once computed, the results of such
computation shall promptly be delivered by the Owner Participant to Old
Dominion, the Facility Owner and the Agent. Within 20 days after the receipt of
the results of any such adjustment, Old Dominion may request that an investment
banking firm selected by the Owner Participant and reasonably satisfactory to
Old Dominion (the "Intermediary") verify, after consultation with the Owner
Participant and Old Dominion, the accuracy of such adjustment in accordance with
this Section 3.4, and the Owner Participant and Old Dominion hereby agree to
provide the Intermediary (on a confidential basis) with all information and
materials as shall be reasonably necessary in connection therewith; PROVIDED
that the Owner Participant shall not be required to disclose any of its own
proprietary data or tax returns. If the Intermediary confirms that such
adjustment is in accordance with this Section 3.4, it shall so certify to Old
Dominion, the Facility Owner, the Owner Participant and the Agent, and such
certification shall be final, binding and conclusive on Old Dominion, the Owner
Participant and the Facility Owner. If the Intermediary concludes that such
adjustment is not in accordance with this Section 3.4, it shall so certify to
Old Dominion, the Facility Owner, the Owner Participant and the Agent, and the
Owner Participant shall again compute the required adjustment. Such
re-computation shall be subject to the provisions of this Section 3.4 and the
results of such re-computation shall be final, binding and conclusive on Old
Dominion, the Facility Owner and the Owner Participant. If Old Dominion does not
request verification of any adjustment within the period specified above, the
computation provided by the Owner Participant shall be final, binding and
conclusive on Old Dominion, the Facility Owner and the
5
Owner Participant. The final determination of any adjustment hereunder shall be
set forth in an amendment to this Operating Equipment Agreement, executed and
delivered by the Facility Owner and Old Dominion and consented to by the Owner
Participant; PROVIDED, HOWEVER, that any omission to execute and deliver such
amendment shall not affect the validity and effectiveness of any such
adjustment. The reasonable fees, costs and expenses of the Intermediary in
verifying an adjustment pursuant to this Section 3.4 shall be paid by Old
Dominion; PROVIDED, FURTHER, that, in the event that such Intermediary
determines that the present value of Basic Payments or, at Old Dominion's
election, Basic Payments and the Purchase Option Price payments to be made under
this Operating Equipment Agreement as calculated by the Owner Participant are
greater than the present value of the correct Basic Payments and Purchase Option
Price payments as certified by the Intermediary, discounted annually at the Debt
Rate, by more than 0.10% of the Equipment Interest Cost, then such expenses of
the Intermediary shall be paid by the Owner Participant. Notwithstanding
anything herein to the contrary, the sole responsibility of the Intermediary
shall be to verify the calculations hereunder and matters of interpretation of
this Operating Equipment Agreement or any other Operative Document shall not be
within the scope of the Intermediary's responsibilities.
SECTION 3.5 MANNER OF PAYMENTS. (a) All Equipment Payments (whether
Basic Payments or Supplemental Payments) shall be paid by Old Dominion in lawful
currency of the United States of America in immediately available funds to the
recipient not later than 12:00 noon (New York City time) on the date due. All
Equipment Payments payable to the Facility Owner (other than Excepted Payments)
shall be paid by Old Dominion to the Facility Owner at its account at Wilmington
Trust Company (ABA Account No. 000000000) Credit - Clover Unit 2 Generating
Trust (Account No.40355-0), or to such other place as the Facility Owner shall
notify Old Dominion in writing; PROVIDED, HOWEVER, that so long as the Liens of
the Loan Agreement and the Leasehold Mortgage have not been discharged, the
Facility Owner hereby irrevocably directs (it being agreed and understood that
such direction shall be deemed to have been revoked after the Liens of the Loan
Agreement and the Leasehold Mortgage shall have been discharged), and Old
Dominion agrees, that all Equipment Payments (other than Excepted Payments)
payable to the Facility Owner shall be paid by wire transfer directly to the
Agent's Account or to such other place as the Agent shall notify Old Dominion in
writing pursuant to the Loan Agreement. Payments constituting Excepted Payments
shall be made to the Person entitled thereto at the address for such Person set
forth in the Participation Agreement, or to such other place as such Person
shall notify Old Dominion in writing.
(b) Payments made to the Facility Owner from the Qualifying Security
and the Qualifying Surety Bond shall satisfy Old Dominion's obligation to pay
amounts of Basic Payments or Supplemental Payments, as the case may be, to the
extent of such payments. Amounts paid to the Facility Owner or the Owner
Participant from the Qualifying Security or the Qualifying Surety Bond in
satisfaction of the Special Equity Remedy shall not satisfy or be treated as
performance of any of Old Dominion's obligations under this Operating Equipment
Agreement or any other Operative Document (other than its obligations under
Section 12 of the Participation Agreement) or in any way limit or offset any
amounts payable by Old Dominion.
6
SECTION 3.6 BUSINESS DAY. Notwithstanding anything herein or in any
other Operative Document to the contrary, if the date on which any payment is to
be made pursuant to this Operating Equipment Agreement or any other Operative
Document is not a Business Day, the payment otherwise payable on such date shall
be payable on the next succeeding Business Day with the same force and effect as
if made on such scheduled date and, PROVIDED such payment is made on such
succeeding Business Day, no interest shall accrue on the amount of such payment
from and after such scheduled date to the time of such payment on such next
succeeding Business Day.
SECTION 3.7 AGREEMENT WITH RESPECT TO AMOUNTS PAYABLE UNDER PAYMENT
UNDERTAKING AGREEMENT. The Facility Owner hereby acknowledges that, pursuant to
the Payment Undertaking Agreement, the Bank has undertaken to make Scheduled
Payments to the Facility Owner or its assignee or pledgee on each date specified
therein, and other specified amounts on the terms set forth therein. These
payments are payable when Basic Payments, Foundation Basic Payments, Termination
Value or amounts computed by reference to Termination Value (including by reason
of the failure to pay the Purchase Option Price or the Foundation Purchase
Option Price), are due and, assuming exercise of the Purchase Option and the
Foundation Purchase Option, when the first installment of Purchase Option Price
and Foundation Purchase Option Price will be due under this Operating Equipment
Agreement and the Operating Foundation Agreement in an amount equal to that
portion of Basic Payments, Foundation Basic Payments, Termination Value and
Purchase Option Price and Foundation Purchase Option Price which corresponds to
the principal and interest on the Series A Loan Certificates due on such date
(including in respect of acceleration). The Facility Owner hereby agrees that
with respect to that portion of Basic Payment or Termination Value and amounts
computed by reference to Termination Value (including by reason of the failure
to pay the Purchase Option Price) under this Operating Equipment Agreement equal
to 95.81 percent (95.81%) of the amounts payable under the Payment Undertaking
Agreement by the Bank that it will first pursue due diligence to obtain payment
from the Bank, before it will pursue Old Dominion under this Operating Equipment
Agreement or any other Operative Document for such amounts. If the Bank has
fully performed its obligations under the Payment Undertaking Agreement in
respect of such amounts, the Facility Owner shall be conclusively presumed to
have satisfied the foregoing requirement.
SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT.
SECTION 4.1 DISCLAIMER OF WARRANTIES. WITHOUT WAIVING ANY CLAIM OLD
DOMINION MAY HAVE AGAINST ANY MANUFACTURER, VENDOR OR CONTRACTOR UNDER THE
CLOVER AGREEMENTS, OLD DOMINION ACKNOWLEDGES AND AGREES SOLELY FOR THE BENEFIT
OF THE FACILITY OWNER AND THE OWNER PARTICIPANT THAT (a) CLOVER UNIT 2 AND EACH
COMPONENT THEREOF ARE OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE ACCEPTABLE TO
OLD DOMINION, (b) OLD DOMINION IS SATISFIED THAT CLOVER UNIT 2 AND EACH
COMPONENT THEREOF ARE SUITABLE FOR THEIR RESPECTIVE PURPOSES, (c) NEITHER THE
FACILITY OWNER NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN
PROPERTY OF SUCH KIND, (d) THE USE AND POSSESSION OF CLOVER UNIT 2 AND EACH
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COMPONENT THEREOF ARE CONVEYED HEREUNDER TO THE EXTENT PROVIDED HEREBY FOR
THE TERM SPECIFIED ABOVE SUBJECT TO ALL APPLICABLE LAWS NOW IN EFFECT OR
HEREAFTER ADOPTED AND IN THE CONDITION OF EVERY PART THEREOF WHEN THE SAME
FIRST BECAME SUBJECT TO THIS OPERATING EQUIPMENT AGREEMENT WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND BY THE FACILITY OWNER OR THE OWNER
PARTICIPANT AND (e) THE FACILITY OWNER CONVEYS FOR THE TERM SPECIFIED
ABOVE, AND OLD DOMINION TAKES THE USE AND POSSESSION OF THE EQUIPMENT INTEREST
UNDER THIS OPERATING EQUIPMENT AGREEMENT "AS-IS", "WHERE-IS" AND "WITH ALL
FAULTS", AND OLD DOMINION ACKNOWLEDGES THAT NEITHER THE FACILITY OWNER, AS THE
FACILITY OWNER OR IN ITS INDIVIDUAL CAPACITY, NOR THE OWNER PARTICIPANT
MAKES NOR SHALL BE DEEMED TO HAVE MADE, AND EACH EXPRESSLY DISCLAIMS, ANY AND
ALL RIGHTS, CLAIMS, WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION,
MERCHANTABILITY THEREOF OR AS TO THE TITLE OF CLOVER UNIT 2, THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM
FROM PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT, THE ABSENCE OF ANY LATENT OR
OTHER DEFECT, WHETHER OR NOT DISCOVERABLE, OR AS TO THE ABSENCE OF ANY
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT THERETO, except that the
Facility Owner represents and warrants that on the Closing Date, the Equipment
Interest will be free of Facility Owner's Liens attributable to the Facility
Owner. It is agreed that all such risks, as between the Facility Owner, the
Owner Participant, the Agent and the Lenders on the one hand and Old Dominion on
the other hand are to be borne by Old Dominion. None of the Facility Owner, the
Owner Trustee, the Owner Participant, the Agent nor the Lenders shall have any
responsibility or liability to Old Dominion or any other Person with respect to
any of the following: (i) any liability, loss or damage caused or alleged to be
caused directly or indirectly by Clover Unit 2 or any Component or by any
inadequacy thereof or deficiency or defect therein or by any other circumstances
in connection therewith; (ii) the use, operation or performance of Clover Unit 2
or any Component or any risks relating thereto; (iii) any interruption of
service, loss of business or anticipated profits or consequential damages; or
(iv) the delivery, operation, servicing, maintenance, repair, improvement,
replacement or decommissioning of Clover Unit 2 or any Component.
During the Term, so long as no Event of Default shall have
occurred and be continuing, the Facility Owner hereby appoints irrevocably and
constitutes Old Dominion its agent and attorney-in-fact, coupled with an
interest, to assert and enforce, from time to time, in the name and for the
account of the Facility Owner and Old Dominion, as their interests may appear,
but in all cases at the sole cost and expense of Old Dominion, whatever claims
and rights the Facility Owner may have in respect of the Equipment Interest
against the manufacturers of the Unit 2 Equipment or the Common Facilities
Equipment, or vendors or contractors under the Clover Agreements.
8
SECTION 4.2 QUIET ENJOYMENT. The Facility Owner agrees that,
notwithstanding any provision of any other Operative Document, so long as no
Event of Default shall have occurred and be continuing, it shall not through its
own actions or inactions interfere with or interrupt the quiet enjoyment of the
use, operation and possession by Old Dominion of the interest in Clover Unit 2
or the Equipment Interest conveyed by this Operating Equipment Agreement subject
to the terms of this Operating Equipment Agreement; PROVIDED, HOWEVER, that the
Facility Owner makes no covenant with respect to the interruption of such
enjoyment, use, operation and possession of Clover Unit 2 or the Equipment
Interest arising from actions of any of the Lenders or the Agent.
SECTION 5. RETURN OF EQUIPMENT INTEREST.
SECTION 5.1 RETURN. Upon the expiration of the Term, unless Old
Dominion shall have purchased the Equipment Interest pursuant to Section 15.1,
or upon any early termination of this Operating Equipment Agreement, other than
a termination in accordance with Section 10, 13 or 18 Old Dominion, at its own
expense, shall return the Equipment Interest by delivering constructive
possession of the same to the Facility Owner, at the location of Clover Unit 2
on the Clover Real Estate in Clover, Virginia and shall comply with the
provisions of Section 5 of the Operating Foundation Agreement in respect of the
Foundation Interest. In the event Virginia Power exercises its rights under
Section 6.3 of the Head Agreements, Old Dominion shall return the Equipment
Interest by delivering constructive possession of the same to Virginia Power, at
the location of Clover Unit 2 on the Clover Real Estate in Clover, Virginia and
shall comply with the provisions of Section 5 of the Operation Foundation
Agreement in respect of the Foundation Interest.
SECTION 5.2 CONDITION UPON RETURN. Except with respect to a return of
the Equipment Interest pursuant to Section 14.3, at the time of any return of
the Equipment Interest by Old Dominion in accordance with Section 5.1, the
following conditions shall be complied with, all at Old Dominion's sole cost and
expense:
(a) the right to use the Equipment Interest granted hereunder
for the benefit of Old Dominion shall cease and
terminate;
(b) Clover Unit 2 will be in at least as good condition as if
it had been maintained, repaired and operated during the
Term in compliance with the provisions of this Operating
Equipment Agreement and there shall be no deferred
maintenance in respect of Clover Unit 2;
(c) Old Dominion shall cooperate with all reasonable requests
of the Owner Participant or the Facility Owner, at the
expense of Old Dominion, for purposes of obtaining, or
enabling the Owner Participant or the Facility Owner or
their respective designees to obtain, any and all
licenses, permits, approvals and consents of any
Governmental Entities or other Persons (including
Virginia Power) that are or will be required to be
9
obtained by the Owner Participant or the Facility Owner
in connection with its use, operation or maintenance of
the Equipment Interest on or after such return in
compliance with Applicable Law and in the manner
contemplated by the Clover Agreements (including, to the
extent permitted by Applicable Law, the transfer by Old
Dominion to the Owner Participant or the Facility Owner
or their respective designees of any such licenses,
permits, approvals and consents of any Governmental
Entities or other Persons as are maintained in the name
of Old Dominion);
(d) Old Dominion shall return and surrender possession of
Equipment Interest to the Facility Owner (or its
designee) free and clear of all Liens (other than Liens
described in clauses (iii), (iv), (v), (vi), (vii),
(viii) (but only in circumstances where Old Dominion
elects the Service Contract Option, no Payment Default,
Bankruptcy Default or Event of Default has occurred and
is continuing and the Facility Owner refinances the then
outstanding aggregate principal amount of the Loans by
the issuance of Additional Loan Certificates under the
Loan Agreement to evidence a New Loan in such aggregate
principal amount and then only to the extent of such
aggregate principal amount), (ix), (x) (but only if such
return shall occur prior to December 30, 2004) and (xi)
of the definition of "Permitted Liens");
(e) Old Dominion shall deliver to the Facility Owner all
books and records (including records maintained on
electronic media) relating to Clover Unit 2 in its
possession (including operating, maintenance, overhaul
and modification records and engineering reports);
(f) Old Dominion and Clover Unit 2 shall be in compliance
with Applicable Laws and relevant licenses, permits,
approvals and consents of Governmental Entities
(without regard to whether Old Dominion is contesting
the validity or applicability thereof) and all other
applicable provisions of this Operating Equipment
Agreement and the Operating Foundation Agreement
(including with respect to the maintenance and
condition thereof);
(g) if Old Dominion exercises the Service Contract Option,
Old Dominion shall take such action as shall be expressly
required pursuant to the Operative Documents, the Clover
Agreements and the Power Sales Agreement, for purposes of
putting into effect the terms and provisions thereof;
(h) Old Dominion shall provide a written report by an
Independent Engineer in form and substance reasonably
acceptable to the Owner Participant certifying that (i)
Clover Unit 2 is in the state of repair and maintenance
required by this Operating Equipment Agreement and the
10
Operating Foundation Agreement and (ii) the following
specific conclusions, based on tests, inspections and
evaluations conducted by such Independent Engineer not
more than 360 days and not less than 180 days prior to
the end of the Term:
(1) the net unit heat rate of the Clover Unit 2
Generating Facility, as determined by an integrated
heat rate test conducted in conjunction with the net
electrical output test, at full load (380 MW, valves
wide open, normal pressure conditions) is at most
10,100 BTU/KWH;
(2) the net electrical output of the Clover Unit 2
Generating Facility, as determined over a 24-hour
test period conducted concurrently with the above
heat rate test, is not less than 380 MW;
(3) the Clover Unit 2 Generating Facility's emissions at
maximum load (390 MW or whatever generation level
results, valves wide open, 5% over normal pressure
conditions) and all reasonably anticipated partial
load conditions, and when operating on all fuels
within ranges permitted under all applicable permits,
are within all applicable operating permits for the
Clover Unit 2 Generating Facility, as determined by a
detailed review of stack emissions data and
historical environmental reporting history;
(4) the performance of the main generator, step-up, unit
auxiliary and all medium to low voltage step-down
transformers are at levels better than or equal to
performance levels required to successfully operate
the Clover Unit 2 Generating Facility at maximum
capability (380 MW) and all reasonably anticipated
partial load conditions;
(5) there are no material tube failures in respect of the
Clover Unit 2 Generating Facility, as demonstrated by
operation of such facility for not less than 72
consecutive hours with turbine inlet pressure at 105%
(or more) of the rated turbine guarantee pressure and
turbine valves wide open;
(6) the boiler feedwater pumps perform at levels better
than or equal to performance levels required to
successfully operate the Clover Unit 2 Generating
Facility at full load (maximum continuous rating, 5%
over normal pressure, valves wide open) and all
reasonably anticipated partial load conditions, as
demonstrated by performance testing that includes
cycling the Clover Unit 2 Generating Facility through
partial to full loads and testing of individual pumps
and testing of the pumps in combination;
11
(7) the Clover Unit 2 Generating Facility is operable
within the operating parameters then existing and
reasonably anticipated to exist for at least 13 years
after the date of such return, as determined based on
an evaluation of the Clover Unit 2 Generating
Facility's systems, emissions controls and such other
tests as may be specified by the Independent
Engineer;
(8) there are no condenser tube leaks in respect of the
Clover Unit 2 Generating Facility, as determined
through inspection;
(9) all the Clover Unit 2 Generating Facility piping,
including all high pressure piping, is acceptable in
accordance with Prudent Utility Practices, as
determined through inspections of piping and piping
components;
(10) major overhauls of the turbine in respect of the
Clover Unit 2 Generating Facility, which include the
examination of the complete turbine including high
pressure, intermediate pressure, and low pressure
blading, bearings, steam and drain pipes, bypass
valves and control valves, have been performed
in accordance with recommended supplier
inspection schedules and Prudent Utility
Practices and all necessary and desirable repairs
and replacements have been performed during such
overhauls;
(11) conveyer belting has been replaced on a
staggered basis based on results of annual
inspections, as is customary for other
facilities similar to Clover Unit 2 that are
operated by the then current Clover Unit 2
Operator;
(12) all other Components shall be in a condition that
reflects the Clover Unit 2 Operator's ongoing
repair, maintenance and replacement program as
described in the Clover Agreements;
(13) it has reviewed in respect of Clover Unit 2 all
operating records, outage reports, all turbine
opening reports, all major equipment inspection
reports, all outstanding work requests and
equipment repair orders over at least the four-year
period preceding the date of expiration or earlier
termination of the Term of this Operating Equipment
Agreement (and, if Old Dominion shall have elected
the Service Contract Option, the engineer shall
state the Unit 2 Generating Facility's
Availability (as defined in the Operating Agency
Agreement), expressed as a percentage, for the three
years preceding the expiration of the Term);
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(14) it has performed in respect of Clover Unit 2 an
analysis of significant deviations from expected
plant conditions as of the Expiration Date,
including an estimate with such certificate of the
cost of restoring Clover Unit 2 to that expected
condition; and
(15) there are no material capital expense items other
than routine major maintenance items anticipated
during the 13 years following the date of such
return.
The conclusions of the Independent Engineer hereinabove
referred to shall be accompanied by such inspection
reports, tests and other data as shall be reasonably
necessary to substantiate such conclusions;
(i) there shall be no material litigation or similar
proceeding pending against Old Dominion or the Clover
Unit 2 Operator with respect to Clover Unit 2 (or the
Equipment Interest or the Foundation Interest) if the
likelihood of a failure to succeed is other than remote
or could, if determined adversely to Old Dominion or the
Clover Unit 2 Operator, reasonably be expected to result
in a material adverse effect on Clover Xxxx 0, the
Equipment Interest or the Foundation Interest;
(j) all property and similar Taxes (other than any Taxes in
respect of which specific provision has been made in the
Operative Documents) payable in connection with such
surrender and return shall, subject to Section 8.2 of the
Participation Agreement, have been paid by Old Dominion;
and
(k) the Owner Participant and the Facility Owner shall have
received evidence satisfactory to the Owner Participant
and the Facility Owner that (i) each of the Clover
Agreements is in full force and effect, (ii) there have
been no amendments, supplements or modifications to the
Clover Agreements other than in accordance with Section 7
of the Clover Agreements Assignment, (iii) if the Service
Contract Option is elected, the Clover Agreements as thus
amended are adequate to enable required performance under
the Power Sales Agreement and (iv) Old Dominion is not,
and to the best of Old Dominion's knowledge no other
party to the Clover Agreements is, in default in the
performance of its obligations, covenants or conditions
contained therein.
SECTION 5.3 ENVIRONMENTAL REPORT. In connection with a return pursuant
to Section 5.2 and Section 14.3, Old Dominion shall provide to the Facility
Owner and the Owner Participant, not later than 270 days prior to the Expiration
Date, or in connection with a return other than on the Expiration Date, not
later than the date of return, an inspection report prepared by a reputable
environmental consulting firm (selected by the Owner Participant and reasonably
acceptable to Old Dominion) as to the environmental condition of Clover Unit 2
and the Clover Real Estate and the compliance or non-compliance with applicable
environmental laws, in form, scope and substance reasonably satisfactory to the
13
Owner Participant. The costs and expenses of preparing and providing such report
shall be for the account of Old Dominion. The provision of such report shall
not relieve Old Dominion of liability with respect to environmental conditions,
known or unknown, in respect of Clover Unit 2 and the Clover Real Estate, and
Old Dominion will take any and all actions necessary to ensure that Clover
Unit 2 and the Clover Real Estate comply with all such environmental laws. If
such report shall indicate that either Clover Unit 2 or the Clover Real
Estate is not in compliance with applicable environmental laws, Old
Dominion shall, within 90 days of the Facility Owner having received such
inspection report, (a) provide the Owner Participant with a remediation plan
approved by the applicable Governmental Entity designed to ensure that
Clover Unit 2 and the Clover Real Estate will be brought into compliance
with applicable environmental laws as promptly as is reasonably practical
and without materially adversely affecting the continued operation of Clover
Unit 2 and (b) (i) place in escrow funds in an amount corresponding to the
Facility Owner's Percentage of the cost estimate of such remediation plan (as
certified by the environmental consulting firm that prepared such report or
another expert reasonably satisfactory to the Owner Participant), which escrow
shall provide for the payment of the costs of such plan as the same become due
and payable or (ii) make other arrangements that are satisfactory to the Owner
Participant, as determined in its sole discretion acting in good faith, for such
purposes. The obligations of Old Dominion set forth in this Section 5.3 shall
survive the termination of this Operating Equipment Agreement and the expiration
of the Term.
SECTION 5.4 EXPENSES. Old Dominion agrees to pay or reimburse, on an
After-Tax Basis, on demand, all costs and expenses incurred by the Facility
Owner, the Owner Trustee, the Owner Participant, the Agent or any Lender
(including the costs, fees and expenses of any Independent Engineer,
environmental consultant fees, financial adviser fees and legal counsel fees) in
connection with any return contemplated by this Section 5.
SECTION 6. LIENS.
Old Dominion will not directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to all or any portion of the Trust
Estate or in, to or under this Operating Equipment Agreement or any other
Operative Document, except Permitted Liens, and Old Dominion shall promptly
notify the Facility Owner of the imposition of any such Lien of which Old
Dominion is aware and shall promptly, at its own expense, take such action as
may be necessary duly to discharge such Lien.
SECTION 7. MAINTENANCE; REPLACEMENTS OF COMPONENTS.
SECTION 7.1 MAINTENANCE. Old Dominion, at its own cost and expense,
will cause Clover Unit 2 to be maintained consistent with Prudent Utility
Practice in good condition, repair and working order and will cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, (a) all as in the judgment of Old Dominion may be necessary so that the
business carried on in connection with the Equipment Interest may be properly
and advantageously conducted by Old Dominion at all times, (b) in accordance
14
with the Clover Agreements, the Old Dominion Indenture and the Pollution
Control Assets Lease Documents and (c) in compliance with all material
Applicable Laws of any Governmental Entity having jurisdiction, including,
without limitation, all material environmental protection, pollution and safety
laws.
SECTION 7.2 REPLACEMENT OF COMPONENTS. In the ordinary course of
maintenance, service, repair or testing, Old Dominion, at its own cost and
expense, may remove or cause to be removed from Clover Unit 2 any Component;
PROVIDED, HOWEVER, that Old Dominion shall cause such Component to be replaced
by a replacement Component which shall be free and clear of all Liens (except
Permitted Liens) and shall be in as good operating condition as, and shall have
a current and residual value, remaining useful life and utility at least equal
to, that of the Component replaced, assuming such replaced Component was in at
least the condition and repair required to be maintained in accordance with the
terms of this Operating Equipment Agreement (each such replacement Component
being herein referred to as a "Replacement Component") as promptly as
practicable. If any part of Clover Unit 2 shall be removed and such removal
shall cause material damage to Clover Xxxx 0, Xxx Xxxxxxxx, xx its own cost and
expense, shall promptly repair or cause the repair of such damage. An undivided
interest equal to the Facility Owner's Percentage in each Component at any time
removed from the Unit 2 Equipment or the Common Facilities Equipment shall
remain subject to the Head Equipment Agreement and this Operating Equipment
Agreement, wherever located, until such time as such Component shall be replaced
by a Replacement Component which has been incorporated in Clover Unit 2 and
which meets the requirements for Replacement Components specified above.
Immediately upon any Replacement Component becoming incorporated in the Unit 2
Equipment or the Common Facilities Equipment, without further act (and at no
cost to the Facility Owner and with no adjustment to the Head Equipment
Agreement Basic Consideration), (i) the replaced Component shall no longer be
subject to the Head Equipment Agreement or this Operating Equipment Agreement,
(ii) an undivided interest equal to the Facility Owner's Percentage in the
Replacement Component shall thereupon become subject to the Head Equipment
Agreement, and (iii) an undivided interest equal to the Facility Owner's
Percentage in such Replacement Component shall become subject to this Operating
Equipment Agreement and be deemed a part of Clover Unit 2 for all purposes
hereof. Notwithstanding anything in this Section 7.2 or elsewhere in this
Operating Equipment Agreement to the contrary, if Old Dominion or the Clover
Unit 2 Operator has determined that a Component is surplus or obsolete, it shall
have the right to remove such Component without replacing it; PROVIDED that no
such Component may be so removed without being replaced if such removal would
diminish the current or residual value, remaining useful life or utility of
Clover Unit 2.
SECTION 8. MODIFICATIONS.
SECTION 8.1 REQUIRED MODIFICATIONS. Subject to the Clover Agreements,
Old Dominion, at its own cost and expense, shall make or cause to be made all
Modifications to Clover Unit 2 as it relates to the Equipment Interest as are
required by the Clover Agreements (each, a "Required Modification").
15
SECTION 8.2 OPTIONAL MODIFICATIONS. Old Dominion at any time may make
or cause to be made any Modification to the Unit 2 Equipment as Old Dominion
considers desirable in the proper conduct of its business (an "Optional
Modification"); PROVIDED that, no Optional Modification to the Unit 2 Equipment
shall impair the operation of Clover Unit 2 or diminish the current or residual
value, remaining useful life or utility of Clover Unit 2 below the current or
residual value, remaining useful life or utility thereof immediately prior to
such Optional Modification, assuming such Clover Unit 2 was then in the
condition required to be maintained by the terms of this Operating Equipment
Agreement and the Operating Foundation Agreement.
SECTION 8.3 TITLE TO MODIFICATIONS; SUBJECTION TO HEAD EQUIPMENT
AGREEMENT. Title to an undivided interest as a tenant-in-common with Virginia
Power in (a) all Modifications to the Retained Assets and (b) all Severable
Modifications to the Pollution Control Assets, shall immediately vest in Old
Dominion and become subject to the Lien of the Old Dominion Indenture and be
deemed Retained Assets for all purposes of this Operating Equipment Agreement.
Title to an undivided interest as a tenant in common with Virginia Power in any
Nonseverable Modifications to the Pollution Control Assets shall immediately
vest in the Pollution Control Assets Lessor and become subject to the Pollution
Control Assets Lease and be deemed Pollution Control Assets for all purposes of
this Operating Equipment Agreement. An undivided interest equal to the Facility
Owner's Percentage in all Modifications shall immediately become subject to the
Head Equipment Agreement (at no cost to the Facility Owner and with no
adjustment to the Head Equipment Agreement Consideration) and be deemed a part
of the Equipment Interest for all purposes hereof, and Old Dominion, at its own
cost and expense, shall take such steps as the Facility Owner may require from
time to time to confirm that the foregoing Modifications are subject to the Head
Equipment Agreement.
SECTION 9. HELL OR HIGH WATER CLAUSE.
This Operating Equipment Agreement is a "net lease" and Old Dominion's
obligation to pay all Equipment Payments payable hereunder shall be absolute and
unconditional under any and all circumstances and shall not be affected by any
circumstance of any character, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which Old Dominion may have
against the Facility Owner, the Owner Trustee, the Owner Participant, the Agent
or any Lender or any other Person, (ii) any lack or invalidity of title or any
defect in the title, condition, design, operation, merchantability or fitness
for use of Clover Unit 2 or any Component, any unavailability of Clover Unit 2,
the Clover Real Estate, any Component, any other portion of Old Dominion's Unit
2 Interest or any part of the foregoing after its delivery and acceptance by Old
Dominion hereunder, for any reason, (iii) any loss or destruction of, or damage
to, Clover Unit 2 or any Component or interruption or cessation in the use or
possession thereof by Old Dominion for any reason whatsoever and of whatever
duration, (iv) the condemnation, requisitioning, expropriation, seizure or other
taking of title to or use of Clover Unit 2, the Clover Real Estate, any
Component, any other portion of Old Dominion's Unit 2 Interest or any part of
the foregoing by any Governmental Entity or otherwise, (v) the invalidity or
unenforceability or lack of due authorization or other infirmity of this
Operating Equipment Agreement or any other Operative Document, (vi) the lack of
16
right, power or authority of the Facility Owner to enter into this Operating
Equipment Agreement or any other Operative Document, (vii) any ineligibility
of Clover Unit 2 or any Component for any particular use, whether or not due to
any failure of Old Dominion or the Clover Unit 2 Operator to comply with any
Applicable Law, (viii) any event of Force Majeure or any frustration, (ix)
any legal requirement similar or dissimilar to the foregoing, any present
or future law to the contrary notwithstanding, (x) any insolvency,
bankruptcy, reorganization or similar proceeding by or against Old Dominion
or any other Person, (xi) any Lien of any Person with respect to Clover Unit 2,
the Clover Real Estate, any Component, any other portion of Old Dominion's Unit
2 Interest or any part of the foregoing, (xii) the existence of the
Qualifying Security, the Payment Undertaking Agreement or the Qualifying
Surety Bond (other than to the extent of the Equipment Payments discharged
from any remittance from the Qualifying Security, the Payment Undertaking
Agreement or the Qualifying Surety Bond) or (xiii) any other cause, whether
similar or dissimilar to the foregoing, any present or future law
notwithstanding, except as set forth herein or in any other Operative Documents,
it being the intention of the parties hereto that all Equipment Payments
payable by Old Dominion hereunder shall continue to be payable in all events in
the manner and at times provided for herein. Such Equipment Payments shall not
be subject to any abatement and the payments thereof shall not be subject
to any setoff or reduction for any reason whatsoever, including any present
or future claims of Old Dominion against the Facility Owner or any other Person
under this Operating Equipment Agreement or otherwise. To the extent
permitted by Applicable Law, Old Dominion hereby waives any and all rights which
it may now have or which at any time hereafter may be conferred upon it, by
statute or otherwise, to terminate, cancel, quit or surrender this Operating
Equipment Agreement with respect to the Equipment Interest, except in accordance
with Sections 10, 13, 14, 15 or 18. If for any reason whatsoever this Operating
Equipment Agreement shall be terminated in whole or in part by operation of law
or otherwise, except as specifically provided herein, Old Dominion nonetheless
agrees to the extent permitted by Applicable Law, to pay to the Facility Owner
an amount equal to each installment of Basic Payment and all Supplemental
Payments due and owing, at the time such payment would have become due and
payable in accordance with the terms hereof had this Operating Equipment
Agreement not been so terminated. Nothing contained herein shall be construed to
waive any claim which Old Dominion might have under any of the Operative
Documents or otherwise or to limit the right of Old Dominion to make any claim
it might have against the Facility Owner or any other Person or to pursue such
claim in such manner as Old Dominion shall deem appropriate.
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.
SECTION 10.1 EVENTS OF LOSS. Old Dominion will notify the Facility
Owner, the Owner Participant and the Agent of any damage to Clover Unit 2, which
Old Dominion reasonably anticipates may cause Clover Unit 2 to be out of service
for at least 18 months or any seizure, expropriation, condemnation or
requisition of title to, or use of, Clover Unit 2. Upon the occurrence of an
Event of Loss described in clause (i), (ii), (iii) or (v) of the definition of
Event of Loss of which it is aware, Old Dominion shall notify the Facility
Owner, the Owner Participant and the Agent promptly but in any event within 30
days of such Event. The Owner Participant or the Facility Owner will promptly
notify Old Dominion of any event of which it is aware that upon election of the
17
Owner Participant would result in an Event of Loss described in clause (iv) or
(vi) of the definition of Event of Loss. If an Event of Loss described in
clauses (i), (ii) or (iii) of the definition of Event of Loss shall occur, then
no later than six months following such occurrence Old Dominion shall notify
the Facility Owner in writing of its election to either (a) if no Event of
Default has occurred and is continuing and subject to the satisfaction of
the conditions set forth in Section 10.3, replace Clover Unit 2 in accordance
with the provisions of the Clover Agreements with a similar facility having
a fair market value (present and residual), remaining useful life and
utility at least equal to that of Clover Unit 2 prior to such
replacement, assuming Clover Unit 2 was in the condition and repair required to
be maintained by this Operating Equipment Agreement and the Operating Foundation
Agreement or (b) terminate this Operating Equipment Agreement and the Operating
Foundation Agreement pursuant to Section 10.2 hereof and Section 10.2 thereof.
Old Dominion may elect the option provided in clause (b) of the preceding
sentence regardless of whether Clover Unit 2 is to be replaced. If Old Dominion
fails to make an election as provided above, an Event of Loss shall be deemed to
occur as of the end of the six month period referred to in the fourth sentence
of this Section 10.1.
SECTION 10.2 PAYMENT OF TERMINATION VALUE; TERMINATION OF EQUIPMENT
PAYMENTS. (a) If (w) Old Dominion shall elect not to replace Clover Unit 2
pursuant to Section 10.3 hereof following an Event of Loss described in clause
(i), (ii) or (iii) of the definition of Event of Loss or an Event of Loss shall
be deemed to occur pursuant to the last sentence of Section 10.1, (x) an Event
of Loss described in clause (iv) of the definition of Event of Loss shall occur,
or (y) an Event of Loss described in clause (v) of the definition of Event of
Loss shall occur, then, on the next Termination Date following Old Dominion's
notice of its election referred to in the second sentence of Section 10.1 in the
case of clause (w) above, and on the next Termination Date occurring at least
three months after such occurrence in the case of clause (x) or (y) above, Old
Dominion shall terminate this Operating Equipment Agreement and pay to the
Facility Owner (A) the Termination Value determined as of the relevant
Termination Date, plus (B) all amounts of Supplemental Payments (including,
without limitation, all costs and expenses of the Facility Owner, the Owner
Trustee, the Owner Participant, the Agent and the Lenders, and all sales, use,
value added and other Taxes required to be indemnified by Old Dominion pursuant
to Section 8.2 of the Participation Agreement, associated with the exercise of
the termination option pursuant to this Section 10.2) due and payable on or
prior to such Termination Date, plus (C) any unpaid Basic Payment due before
such Termination Date and, if such Termination Date shall be a Payment Date, the
Basic Payment (to the extent payable in arrears) due and payable on such Payment
Date. If an Event of Loss described in clause (vi) of the definition of Event of
Loss shall occur, then on the next Termination Date occurring at least 30 days
following such Event of Loss Old Dominion shall terminate this Operating
Equipment Agreement and pay to the Facility Owner (X) an amount equal to the sum
of the outstanding balance of the Loan Certificates and the proceeds of the
Qualifying Security, plus (Y) all amounts of Supplemental Payments (including,
without limitation, all costs and expenses of the Facility Owner, the Owner
Trustee, the Owner Participant, the Agent and the Lenders, and all sales, use,
value added and other Taxes required to be indemnified by Old Dominion pursuant
to Section 8.2 of the Participation Agreement associated with the exercise of
the termination option pursuant to this Section 10.2) due and payable on or
prior to such Termination Date, plus (Z) any unpaid Basic Payment due before
18
such Termination Date and, if such Termination Date shall be a Payment Date,
the Basic Payment (to the extent payable in arrears) due and payable on such
Payment Date. In connection with Old Dominion's payment contemplated by
the preceding sentence, Old Dominion, at the option of the Facility Owner,
shall either liquidate the Qualifying Security and remit the proceeds to the
Facility Owner or deliver the bonds or other securities in the Qualifying
Security to the Facility Owner in satisfaction of Old Dominion's obligation
to pay the proceeds of the Qualifying Security.
(b) Concurrently with the payment of all sums required to be
paid pursuant to this Section 10.2 and Section 10.2 of the Operating Foundation
Agreement, (1) Basic Payments for the Equipment Interest shall cease to accrue,
(2) Old Dominion shall cease to have any liability to the Facility Owner with
respect to the Equipment Interest except for Supplemental Payment obligations
(including, without limitation, those under Sections 8.1 and 8.2 of the
Participation Agreement and the Tax Indemnity Agreement) surviving pursuant to
the express provisions of any Operative Document or which have otherwise accrued
but not been paid as of such Termination Date, (3) the Facility Owner will
prepay the Loan Certificates pursuant to Section 2.10 of the Loan Agreement, (4)
the Facility Owner will at Old Dominion's cost and expense execute and deliver
to Old Dominion a release or termination of this Operating Equipment Agreement,
(5) the Facility Owner shall transfer the Facility Owner's Unit 2 Interest to
Old Dominion pursuant to this Section 10.2 and Section 10.2 of the Operating
Foundation Agreement, Section 10 of the Ground Lease and Sublease and Section
10.1 of each of the Head Agreements on an "as is", "where is" and "with all
faults" basis, without representations or warranties other than a warranty as to
the absence of Facility Owner's Liens and Owner Participant's Liens and (6) this
Operating Equipment Agreement shall terminate and Old Dominion shall, assuming
the Facility Owner and the Owner Participant are in compliance with all of their
obligations under the Operative Documents, cause the Agent to discharge the
Liens of the Loan Agreement and the Leasehold Mortgage and to execute,
acknowledge and deliver (and file and record where appropriate) appropriate
releases and all other documents or instruments necessary or desirable to effect
the foregoing, all in form and substance reasonably satisfactory to the Facility
Owner and at the cost and expense of Old Dominion.
(c) Any payments with respect to the Equipment Interest
received at any time by the Facility Owner, the Owner Trustee or Old Dominion
from any Governmental Entity as a result of the occurrence of an Event of Loss
described in clause (iii) of the definition of Event of Loss shall be applied as
follows:
(i) so much of such payments as shall not exceed the
amount required to be paid by Old Dominion pursuant to clause
(A) of paragraph (a) of this Section 10.2 shall be applied in
reduction of Old Dominion's obligation to pay such amount if
not already paid by Old Dominion or, if already paid by Old
Dominion, shall be applied to reimburse Old Dominion for its
payment of such amount; and
(ii) the balance, if any, of such payments remaining
thereafter shall be apportioned between the Facility Owner
and Old Dominion in the proportion that the value of the
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Facility Owner's Unit 2 Interest bears to the value of Old
Dominion's Unit 2 Interest.
If the Indenture Trustee shall receive any payments with
respect to the Equipment Interest from any Governmental Entity as a result of
the occurrence of an Event of Loss described in clause (iii) of the definition
of Event of Loss, Old Dominion shall pay to the Facility Owner an amount equal
to the amount that would have been payable to the Facility Owner under clause
(ii) of this paragraph (c) had such payments been made to Old Dominion.
SECTION 10.3 REPLACEMENT. Old Dominion's right to replace Clover Unit 2
pursuant to clause (a) of Section 10.1 hereof shall be subject to the
fulfillment, at Old Dominion's sole cost and expense, in addition to the
conditions contained in said clause (a) and the conditions contained in Section
10.3 of the Operating Foundation Agreement, of the following conditions:
(a) on the date Old Dominion shall notify the Facility Owner
of its election to replace Clover Unit 2 pursuant to
Section 10.1, Old Dominion shall deliver to the Facility
Owner and the Owner Participant a tax opinion of counsel,
such counsel and its opinion to be reasonably
satisfactory to the Facility Owner and the Owner
Participant, to the effect that, assuming the proposed
replacement is completed in the manner and within the
time proposed, such replacement will not adversely affect
the federal income tax consequences of the transaction
contemplated by the Operative Documents to the Owner
Participant, the Facility Owner or any Affiliate, such
opinion to take into account any payments made by Old
Dominion (in its discretion) to reimburse any of such
Persons for any loss of Tax Benefits;
(b) Old Dominion shall cause the replacement of Clover Unit 2
to commence as soon as practicable after the occurrence
of such Event of Loss and in all events within 24 months
of the occurrence of the event that caused such Event of
Loss and will cause work on such replacement to proceed
diligently thereafter. As the replacement of Clover Unit
2 progresses, title to an undivided interest in such
replaced facilities (i) which are replacements of the
Retained Assets shall immediately vest in Old Dominion
and Virginia Power as tenants-in-common, and (ii) which
are replacements of Pollution Control Assets shall
immediately vest in the Pollution Control Assets Lessor
and Virginia Power as tenants-in-common, subject to the
Lien of the Old Dominion Indenture and, if such
facilities are replacements of Pollution Control Assets,
the Pollution Control Assets Lease, and an undivided
interest equal to the Facility Owner's Percentage in such
replaced facilities corresponding to the Unit 2 Equipment
and the Common Facilities Equipment shall become subject
to the Head Equipment Agreement and to this Operating
Equipment Agreement, automatically, for all purposes
hereof, without any further act by any Person;
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(c) on the date of the completion of such replacement of
Clover Unit 2 (the "Replacement Closing Date") the
following documents shall have been duly authorized,
executed and delivered and, if appropriate, filed for
recordation by the respective party or parties thereto
and shall be in full force and effect, and an executed
counterpart of each thereto shall be delivered to the
Facility Owner and the Owner Participant: (1) supplements
to the Head Equipment Agreement and this Operating
Equipment Agreement, subjecting an undivided interest
equal to the Facility Owner's Percentage in the replaced
facilities to the Head Equipment Agreement and this
Operating Equipment Agreement (with no change in Head
Equipment Agreement Basic Consideration or Basic Payments
as a result of such replacement), (2) supplements to the
Loan Agreement and the Leasehold Mortgage subjecting the
Facility Owner's Unit 2 Interest in such replaced
facilities to the Liens of the Loan Agreement and the
Leasehold Mortgage, (3) supplements to the Clover
Operating Agreement and the Operating Agency Agreement as
are necessary to subject the replaced facilities to the
Clover Operating Agreement and the Operating Agency
Agreement, (4) such recordings and filings as may be
reasonably requested by the Owner Participant or the
Agent to be made or filed in such public offices as are
necessary, (5) an opinion of counsel of Old Dominion,
such counsel and such opinion to be reasonably
satisfactory to the Owner Participant and the Agent, to
the effect that (w) the supplements to the Head Equipment
Agreement and this Operating Equipment Agreement referred
to in clause (1) above constitute effective instruments
for subjecting such replaced facilities to the Head
Equipment Agreement and this Operating Equipment
Agreement, (x) the supplements to the Loan Agreement and
the Leasehold Mortgage referred to in clause (2) above
constitute effective instruments for subjecting the
Facility Owner's Unit 2 Interest in such replaced
facilities to the Liens of the Loan Agreement and the
Leasehold Mortgage, (y) all filings and other action
necessary to perfect and protect the Facility Owner's
interest in an undivided interest equal to the Facility
Owner's Percentage in the replaced facilities and to
subject the Facility Owner's Unit 2 Interest in such
replaced facilities to the Liens of the Loan Agreement
and the Leasehold Mortgage have been accomplished, and
(z) such replaced facilities corresponding to the Unit 2
Equipment and the Common Facilities Equipment have been
constructively severed from the Clover Real Estate and,
hence, constitute personal property for purposes of
Virginia law, (6) an appraisal by an Independent
Appraiser, certifying that Clover Unit 2 as so replaced
has a fair market value (present and residual), remaining
useful life and utility at least equal to Clover Unit 2
prior to the damage or destruction causing the Event of
Loss (assuming Clover Unit 2 was in the condition and
repair required to be maintained by the terms of this
Operating Equipment Agreement and the Operating
Foundation Agreement), (7) a report by an Independent
Engineer certifying that Clover Unit 2 as so replaced is
in a state of repair and condition required by this
Operating Equipment Agreement and the Operating
21
Foundation Agreement, (8) an Officer's Certificate of Old
Dominion as to compliance with this Section 10.3 and that
no Event of Default shall have occurred as a result of
the replacement and (9) satisfactory evidence as to the
compliance with Section 11 of this Operating Equipment
Agreement and the Operating Foundation Agreement with
respect to Clover Unit 2, as so replaced;
(d) on the Replacement Closing Date, the Facility Owner shall
receive a valid interest under the Head Equipment
Agreement in all or the portion of Clover Unit 2
replaced, free and clear of Liens other than Permitted
Liens; and
(e) on the Replacement Closing Date, the Facility Owner, the
Owner Participant and the Agent shall have received such
documents and evidence with respect to Old Dominion and
all or the portion of Clover Unit 2 replaced as the
Facility Owner, the Owner Participant and the Agent may
request in order to establish the consummation of the
transactions contemplated by this Section 10.3 and
Section 10.3 of the Operating Foundation Agreement, the
taking of all necessary action in connection therewith
(including the receipt of all relevant licenses, permits,
approvals and consents of all Governmental Entities), and
compliance with all conditions set forth in this Section
10.3 and in Section 10.3 of the Operating Foundation
Agreement, in each case in form and substance reasonably
satisfactory to the Facility Owner, the Owner Participant
and the Agent.
Whether or not the transactions contemplated by this Section 10.3 are
consummated, Old Dominion agrees to pay or reimburse, on an After-Tax Basis, any
costs or expenses (including reasonable legal fees and expenses) incurred by the
Facility Owner, the Owner Trustee, the Owner Participant, the Lenders or the
Agent in connection with the transactions contemplated by this Section 10.3.
SECTION 10.4 EMINENT DOMAIN. In the event that during the Term the use
of all or any portion of the Equipment Interest is requisitioned or taken by or
pursuant to a request of any Governmental Entity under the power of eminent
domain or otherwise for a period which does not constitute an Event of Loss, Old
Dominion's obligation to pay all installments of Basic Payments shall continue
for the duration of such requisitioning or taking. Old Dominion shall be
entitled to receive and retain for its own account all sums payable for any such
period by such Governmental Entity as compensation for such requisition or
taking of possession. Any amount referred to in this Section 10.4 which is
payable to Old Dominion shall not be paid to Old Dominion, or if it has been
previously paid directly to Old Dominion, shall not be retained by Old Dominion,
if at the time of such payment a Payment Default or Event of Default shall have
occurred and be continuing, but shall be paid to and held by the Facility Owner
22
as security for the obligations of Old Dominion under this Operating Equipment
Agreement, and upon the earlier of (a) 180 days after the Facility Owner
shall have received such amount; PROVIDED the Facility Owner has not proceeded
to exercise any remedy under Section 17 and it is not stayed or prevented
by law or otherwise from exercising such remedy and (b) such time as there
shall not be continuing any such Payment Default or Event of Default, such
amount shall be paid to Old Dominion.
SECTION 11. INSURANCE.
(a) Subject to paragraph (b), Old Dominion shall procure at its own
expense and maintain or cause to be maintained in full force and effect:
(i) workers' compensation insurance as required by Applicable
Law and, to the extent applicable, Longshoremen's and Harbor Workers'
Compensation Act insurance including, without limitation, employer's
liability insurance with a limit of not less than $25,000,000
(including coverage under any applicable excess umbrella liability
policy) per occurrence and in the aggregate amount where applicable;
(ii) commercial general liability insurance with (A)
Associated Electric & Gas Insurance Services Limited or (B) other
insurance carriers having a reported policyholder surplus of
$50,000,000 or more, and, if rated by A.M. Best Company having a Best
rating of at least A-VII or better (except for policies underwritten by
Lloyd's of London and other companies reasonably acceptable to the
Facility Owner), against premises and operations claims for bodily
injury (including death) and property damage to third parties. Such
insurance shall provide blanket contractual liability, broad form
property damage and personal injury coverage with no less than
$25,000,000 per occurrence/aggregate (including coverage under any
applicable excess umbrella liability policy);
(iii) business automobile liability insurance against claims
for bodily injury (including death) and property damage covering all
owned, leased, non-owned and hired motor vehicles, in an amount not
less than $20,000,000 (including coverage under any applicable excess
umbrella liability policy) minimum limit per occurrence for combined
bodily injury and property damage and in the aggregate where
applicable; and
(iv) property damage insurance on a basis as required under,
and to the extent required by, the Old Dominion Indenture and the
Clover Agreements, in any event consistent with prudent industry
standards and risk management practices and taking into account Old
Dominion's business operations, capital structure, financial condition
and risk management policies. Old Dominion shall at all times actively
and prudently pursue its rights conferred by Article 4 and 9 of the
Clover Operating Agreement to cause the Clover Unit 2 Operator to
maintain property damage insurance meeting the criteria of the
preceding sentence.
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(b) All policies of insurance maintained pursuant to clauses (i) and
(iv) of paragraph (a) of this Section 11 shall be with insurance carriers having
a reported policyholder surplus of $50,000,000 or more and, if rated by A.M.
Best Company having a Best rating of at least A-VII or better (except for
policies underwritten by Lloyd's of London and other companies reasonably
acceptable to the Facility Owner). Old Dominion's obligation to maintain
liability insurance in the amounts set forth in clause (ii) of paragraph (a) of
this Section 11 shall be subject to the availability of such insurance in such
amounts on commercially reasonable terms. If such amounts are not available on
commercially reasonable terms, Old Dominion shall maintain such liability
insurance in the amount then indicative of prudent industry standards taking
into account Old Dominion's business operations, capital structure, financial
condition and risk management policies but, in no event in amounts per
occurrence less than or on terms less beneficial to the insureds than liability
insurance maintained by Old Dominion in respect of other coal-fired generating
units owned or leased by Old Dominion for which Old Dominion has the ability to
determine liability insurance amounts and provisions. If Old Dominion maintains
any such coverage on a "claims made" basis, it shall cause any such coverage to
remain in effect for a period of two years after the earlier of the termination
of such insurance coverage or the termination of this Operating Equipment
Agreement. Old Dominion will periodically review the liability and property
insurance maintained by it or on its behalf and will, if necessary, revise such
coverages in order that the liability and property insurance maintained by it or
on its behalf is consistent with that maintained by prudent power producers
similar to Old Dominion taking into account Old Dominion's business operations,
capital structure, financial condition and risk management policies, subject to
the availability of such insurance in such amounts on commercially reasonable
terms.
(c) All policies of insurance required to be maintained pursuant to
clause (ii) of paragraph (a) of this Section 11 shall within 90 days of the
Closing Date, (i) provide that there shall be no recourse against the Facility
Owner, the Owner Trustee, the Owner Participant, the Agent and the Lenders for
payment of premiums, commissions, assessments or calls or other amounts with
respect thereto, (ii) provide the Facility Owner, the Owner Trustee, the Owner
Participant, the Agent and the Lenders with at least 60 days' (or 10 days' in
the case of nonpayment of premiums) prior written notice of reduction in
coverage or amount (other than a reduction in coverage or amount resulting from
a payment thereunder), cancellation or non-renewal of any policy, (iii) waive
the right of subrogation of the insurers against the Facility Owner, the Owner
Trustee, the Owner Participant, the Agent and the Lenders, (iv) provide that the
insurance be primary and not excess to or contributory to any insurance or
self-insurance maintained by the Facility Owner, the Owner Trustee, the Owner
Participant, the Agent and the Lenders, and (v) insure the interest of the
Facility Owner, the Owner Trustee, the Owner Participant, the Agent and the
Lenders regardless of any breach or violation by Old Dominion, Virginia Power or
others of warranties, declarations or conditions contained in such policies, any
action or inaction of Old Dominion or others, or any foreclosure relating to
Clover Unit 2 or any change in ownership of all or any portion of Clover Unit 2.
All liability policies required to be maintained pursuant to this Section 11
shall (x) name the Facility Owner, the Owner Trustee, the Owner Participant, the
Agent and the Lenders as additional insureds, (y) include a severability of
interest or cross liability clause, and (z) waive the right of subrogation of
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the insurers against the Facility Owner, the Owner Trustee, the Owner
Participant, the Agent and the Lenders.
(d) Old Dominion will advise the Facility Owner, the Owner Trustee, the
Owner Participant, the Agent and the Lenders in writing promptly after obtaining
Actual Knowledge thereof of any default in the payment of any premium and any
other act or omission on the part of Old Dominion or others which might
invalidate or render unenforceable, in whole or in part, any insurance required
to be maintained pursuant to paragraph (a) of this Section 11 hereof.
(e) Within 30 days of each fiscal year of Old Dominion, Old Dominion
will provide the Facility Owner, the Owner Trustee, the Owner Participant and
the Agent with a certificate of insurance of Xxxxxx Xxxxx Worldwide or an
independent insurance broker or consultant of recognized standing in Virginia
(i) setting forth the carriers with which the liability insurance required by
this Section 11 is maintained, (ii) to the effect that such insurance complies
with this Section 11, and (iii) to the effect that all premiums in respect of
such insurance have been paid.
(f) In the event Old Dominion fails to take out or maintain insurance
coverage required by this Section 11, the Facility Owner, upon 30 days' prior
written notice (unless the aforementioned insurance would lapse within such
period, in which event notice should be given as soon as reasonably possible) to
Old Dominion of any such failure, may (but shall not be obligated to) take out
the required policies of insurance and pay the premiums on the same in
accordance with Section 20.
(g) At any time the Facility Owner (either directly or in the name of
the Owner Participant) may at its own expense and for its own account carry
insurance with respect to its interest in the Equipment Interest; PROVIDED, that
such insurance does not in any way interfere with Old Dominion's ability to
obtain insurance with respect to the Equipment Interest described in paragraph
(a) of this Section 11. Any insurance payments received from policies maintained
by the Facility Owner pursuant to the previous sentence shall be retained by the
Facility Owner without reducing or otherwise affecting Old Dominion's
obligations hereunder.
(h) As soon as practical after the effective date of the property
damage insurance policy or policies obtained by the Clover Unit 2 Operator for
Clover Unit 2 for property damage insurance subsequent to the commercial
operation of Clover Xxxx 0, Xxx Xxxxxxxx will provide the Owner Participant with
a written description of the insurance coverages then maintained for Clover Unit
2 and a certificate of Old Dominion to the effect that (i) it has pursued its
rights under Articles 7 and 9 of the Clover Operating Agreement to cause such
insurance coverage to comply with the provisions of paragraph (a) of this
Section 11 and (ii) the insurance maintained in respect of Clover Unit 2
complies with this Section 11.
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SECTION 12. INSPECTION.
During the Term, at such times as reasonably requested, each of the
Owner Participant, the Facility Owner, the Owner Trustee, the Agent, each Lender
and their representatives may, at reasonable times, on reasonable notice to Old
Dominion and the Clover Unit 2 Operator and at their own risk and expense
(except, at the expense, but not risk, of Old Dominion when an Event of Default
has occurred and is continuing), inspect Clover Unit 2 and the Clover Real
Estate; PROVIDED, HOWEVER, that any such inspection will not interfere with the
Co-Owners' normal commercial operation of Clover Unit 2 and will be in
accordance with Old Dominion's and the Clover Unit 2 Operator's safety and
insurance programs.
SECTION 13. TERMINATION OPTION FOR BURDENSOME EVENTS.
SECTION 13.1 ELECTION TO TERMINATE. After the occurrence and during the
continuance of any of the events specified below, Old Dominion shall have the
right, at its option, so long as no Event of Default shall have occurred and be
continuing, upon at least 30 days' (one day's in the case of a Burdensome Tax
Law Change) prior written notice to the Facility Owner, the Owner Trustee, the
Owner Participant and the Agent to terminate this Operating Equipment Agreement
on the Termination Date specified in such notice (which shall be a date
occurring not more than 90 days after such notice in the case of the events
described in clauses (a) and (b) below and a date occurring not more than three
days after such notice in the case of an event described in clause (c) below)
if:
(a) it shall have become illegal for Old Dominion to continue
this Operating Equipment Agreement or the Operating Foundation
Agreement or for Old Dominion to make payments under this Operating
Equipment Agreement or the Operating Foundation Agreement and the
transactions contemplated by the Operative Documents cannot be
restructured in a manner reasonably acceptable to the Transaction
Parties;
(b) one or more events outside the control of Old Dominion
shall have occurred which, in the reasonable judgment of Old Dominion,
will give rise to an obligation by Old Dominion to pay or indemnify in
respect of Section 8.1 or 8.2 of the Participation Agreement or the Tax
Indemnity Agreement; PROVIDED, HOWEVER, that (i) the indemnity
obligation (and the underlying cost or Tax) can be avoided in whole or
in part by such termination and (ii) the amount of such avoided
payments would exceed (on a present value basis, discounted annually at
the Debt Rate, to the date of the termination) 2.5 percent of the sum
of the Equipment Interest Cost and the Foundation Interest Cost. If the
Owner Participant shall waive its right to amounts of indemnification
payments in respect of Section 8.1 or 8.2 of the Participation
Agreement or the Tax Indemnity Agreement in excess of such amount as to
cause such avoided payments, computed in accordance with the preceding
sentence, not to exceed 2.5 percent of the sum of the Equipment
Interest Cost and the Foundation Interest Cost, no such termination
option in favor of Old Dominion shall exist; or
26
(c) a Burdensome Tax Law Change shall occur.
If Old Dominion does not give notice of its exercise of the termination option
under this Section 13.1 within six months (two days in the case of an event
described in clause (c) above) of the date Old Dominion receives notice or
Actual Knowledge of the event or condition described above, Old Dominion will
lose its rights to terminate this Operating Equipment Agreement pursuant to this
Section 13.1 as a result of such event or condition. Old Dominion shall be
permitted to exercise the option provided by this Section 13.1 only if it shall
simultaneously exercise the termination option provided by Section 13.1 of the
Operating Foundation Agreement.
SECTION 13.2 PROCEDURE FOR EXERCISE OF TERMINATION OPTION. If Old
Dominion shall have exercised its option under Section 13.1, on the Termination
Date specified in Old Dominion's notice of such exercise, Old Dominion shall pay
to the Facility Owner (a) (i) in the case of an event specified in clause (a) or
(b) of Section 13.1, the higher of Fair Market Sales Value of the Facility
Owner's Unit 2 Interest allocated to the Equipment Interest in accordance with
the definition of Fair Market Sales Value and Termination Value, determined as
of such Termination Date, and (ii) in the case of an event specified in clause
(c) of Section 13.1, the Burdensome Tax Law Change Value, plus (b) all amounts
of Supplemental Payments (including all costs and expenses of the Facility
Owner, the Owner Trustee, the Owner Participant, the Agent and the Lenders and
all sales, use, value added and other Taxes covered by Section 8.2 of the
Participation Agreement associated with the exercise of the termination option
pursuant to this Section 13) due and payable on or prior to the Termination Date
and (c) any unpaid Basic Payments due before such Termination Date and, if such
Termination Date shall be a Payment Date, the Basic Payment (to the extent
payable in arrears) due and payable on such Payment Date. Concurrently with the
payment of all sums specified in this Section 13.2 and Section 13.2 of the
Operating Foundation Agreement, (1) Basic Payments for the Equipment Interest
shall cease to accrue, (2) Old Dominion shall cease to have any liability to the
Facility Owner with respect to the Equipment Interest, except for Supplemental
Payment obligations (including those under Sections 8.1 and 8.2 of the
Participation Agreement and the Tax Indemnity Agreement) surviving pursuant to
the express terms of any Operative Document or which have otherwise accrued but
not been paid as of the Termination Date, (3) the Facility Owner will prepay the
Loan Certificates pursuant to Section 2.10 of the Loan Agreement, (4) the
Facility Owner will execute and deliver to Old Dominion to be prepared (and
where appropriate recorded and filed), at Old Dominion's cost and expense, a
release or termination of this Operating Equipment Agreement and the Operating
Foundation Agreement, (5) the Facility Owner will transfer, pursuant to this
Section 13.2 and Section 13.2 of the Operating Foundation Agreement, Section 10
of the Ground Lease and Sublease and Section 10.1 of each of the Head
Agreements, the Facility Owner's Unit 2 Interest to Old Dominion on an "as is",
"where is" and "with all faults" basis, without representations or warranties
other than a warranty as to the absence of Facility Owner's Liens and Owner
Participant's Liens and (6) this Operating Equipment Agreement shall terminate
and, assuming the Facility Owner and the Owner Participant have complied with
all of their obligations under the Operative Documents, Old Dominion shall cause
the Agent to discharge the Liens of the Loan Agreement and the Leasehold
Mortgage and to execute, acknowledge and deliver, and record and file (as
appropriate), appropriate releases and all other documents or instruments
27
necessary or desirable to effect the foregoing, all in form and substance
reasonably satisfactory to the Facility Owners and Old Dominion, at the cost
and expense of Old Dominion.
SECTION 14. TERMINATION FOR OBSOLESCENCE.
SECTION 14.1 TERMINATION. Upon 270 days' prior written notice to the
Facility Owner, the Owner Participant and the Agent, which notice shall contain
a certification by the Board of Directors of Old Dominion that Clover Unit 2 is
economically or technologically obsolete or that Clover Unit 2 is surplus to Old
Dominion's needs, Old Dominion shall have the option, so long as no Payment
Default or Event of Default shall have occurred and be continuing, to terminate
this Operating Equipment Agreement on any Termination Date occurring on or after
the fifth anniversary of the Closing Date (the "Obsolescence Termination Date")
on the terms and conditions set forth in this Section 14. Any termination of
this Operating Equipment Agreement pursuant to this Section 14 shall be
permitted only in conjunction with a simultaneous termination of the Operating
Foundation Agreement pursuant to Section 14 thereof.
SECTION 14.2 SOLICITATION OF OFFERS. If Old Dominion shall give the
Facility Owner notice pursuant to Section 14.1 and the Facility Owner shall not
have elected to retain the Equipment Interest and the Foundation Interest
pursuant to Section 14.3 hereof and Section 14.3 of the Operating Foundation
Agreement, respectively, Old Dominion may, as non-exclusive agent for the
Facility Owner, use its best efforts to obtain bids for the cash purchase of the
Facility Owner's Unit 2 Interest. The Facility Owner shall also have the right
to obtain bids for the cash purchase of the Facility Owner's Unit 2 Interest
either directly or through agents other than Old Dominion. Old Dominion shall
certify to the Facility Owner within five days after Old Dominion's receipt of
each bid or offer (and in any event prior to the Obsolescence Termination Date)
the amount and terms thereof and the name and address of the party (which shall
not be Old Dominion, any member cooperative of Old Dominion or any Affiliate of
any thereof) submitting such bid or offer.
SECTION 14.3 RIGHT OF FACILITY OWNER TO RETAIN THE EQUIPMENT INTEREST.
The Facility Owner may irrevocably elect to retain, rather than sell, the
Equipment Interest, by giving notice to Old Dominion at least 90 days prior to
the Obsolescence Termination Date, PROVIDED that the Facility Owner shall
simultaneously elect to retain the Foundation Interest pursuant to Section 14.3
of the Operating Foundation Agreement. If the Facility Owner elects to retain
the Equipment Interest pursuant to this Section 14.3, on the Obsolescence
Termination Date (a) Old Dominion shall pay to the Facility Owner all
Supplemental Payments (including all costs and expenses of the Facility Owner,
the Owner Trustee, the Owner Participant, the Agent and the Lenders and all
sales, use, value added and other Taxes covered by Section 8.2 of the
Participation Agreement associated with the exercise of the termination option
pursuant to this Section 14.3) due and payable on such Obsolescence Termination
Date and (b) Old Dominion shall pay to the Facility Owner any unpaid Basic
Payment due before such Obsolescence Termination Date and, if such Obsolescence
Termination Date shall be a Payment Date, the Basic Payment (to the extent
payable in arrears) due and payable on such Payment Date, but shall not be
28
required to pay Termination Value. Concurrently with the payment of all sums
required to be paid pursuant to this Section 14.3 and Section 14.3 of the
Operating Foundation Agreement (i) Basic Payments for the Equipment Interest
shall cease to accrue, (ii) Old Dominion shall cease to have any liability
hereunder to the Facility Owner with respect to the Equipment Interest, except
for Supplemental Payment obligations (including, without limitation, those under
Sections 8.1 and 8.2 of the Participation Agreement and the Tax Indemnity
Agreement) surviving pursuant to the express terms of any Operative Document or
which have otherwise accrued but not been paid as of such Obsolescence
Termination Date, (iii) the Facility Owner shall pay all principal and accrued
interest on the Loan Certificates, (iv) Old Dominion will return the Equipment
Interest to the Facility Owner in accordance with paragraphs (a), (b), (c), (d),
(e) and (f) of Section 5.2 and Section 5.3, and (v) this Operating Equipment
Agreement shall terminate and, assuming the Facility Owner and the Owner
Participant have complied with all of their obligations under the Operative
Documents, Old Dominion shall cause the Agent to discharge the Liens of the Loan
Agreement and the Leasehold Mortgage and to execute and deliver appropriate
releases and all other documents or instruments necessary or desirable to effect
the foregoing, all at the cost and expense of Old Dominion.
SECTION 14.4 PROCEDURE FOR EXERCISE OF TERMINATION OPTION. If the
Facility Owner has not elected to retain the Equipment Interest and the
Foundation Interest in accordance with Section 14.3 hereof and Section 14.3 of
the Operating Foundation Agreement, respectively, on the Obsolescence
Termination Date the Facility Owner shall sell the Facility Owner's Unit 2
Interest under this Section 14.4, Section 14.4 of the Operating Foundation
Agreement, Section 2.5 of the Ground Lease and Sublease and Section 6.4 of each
of the Head Agreements to the bidder or bidders (which shall not be Old Dominion
or a cooperative member of Old Dominion or any Affiliate thereof), that shall
have submitted the highest net cash bid or bids with respect to the Facility
Owner's Unit 2 Interest before the Obsolescence Termination Date, and Old
Dominion shall certify to the Facility Owner and the Owner Participant that such
buyer is not Old Dominion or a cooperative member of Old Dominion or any
Affiliate thereof. On the Obsolescence Termination Date, Old Dominion shall pay
to the Facility Owner (a) the excess, if any, of Termination Value determined as
of such Obsolescence Termination Date over the total sale price for the Facility
Owner's Unit 2 Interest allocated to the Equipment Interest in accordance with
the definition of Fair Market Sales Value paid to or retained by the Facility
Owner, after deducting from the sale price the expenses, if any, incurred by the
Facility Owner and the Owner Participant in connection with such sale, (b) any
unpaid Basic Payment due before such Obsolescence Termination Date and, if such
Obsolescence Termination Date shall be a Payment Date, any Basic Payment (to the
extent payable in arrears) due and payable on such Payment Date, plus (c) all
amounts of Supplemental Payments (including all costs and expenses of the
Facility Owner, the Owner Trustee, the Owner Participant, the Agent and the
Lenders and all sales, use, value added and other Taxes covered by Section 8.2
of the Participation Agreement associated with the exercise of the termination
options pursuant to this Section 14 and Section 14 of the Operating Foundation
Agreement) due and payable on such Obsolescence Termination Date. Concurrently
with the payment of all sums required to be paid pursuant to this Section 14.4
and Section 14.4 of the Operating Foundation Agreement, (i) Basic Payments for
the Equipment Interest shall cease to accrue, (ii) Old Dominion shall cease to
have any liability hereunder to the Facility Owner with respect to the Equipment
Interest, except for
29
Supplemental Payment obligations (including Sections 8.1 and 8.2 of the
Participation Agreement and the Tax Indemnity Agreement) surviving pursuant to
the express terms of any Operative Document or which have otherwise accrued but
not been paid as of such Obsolescence Termination Date, (iii) the Facility Owner
will prepay the Loan Certificates pursuant to Section 2.10 of the Loan
Agreement, (iv) the Facility Owner will transfer (by an appropriate instrument
of transfer in form and substance reasonably satisfactory to the Facility Owner
and prepared and recorded at Old Dominion's expense) the Facility Owner's Unit 2
Interest under this Section 14.4, Section 14.4 of the Operating Foundation
Agreement, Section 2.5 of the Ground Lease and Sublease and Section 6.4 of each
of the Head Agreements to the purchaser on an "as is", "where is" and "with all
faults" basis, without representations or warranties other than a warranty as to
the absence of Facility Owner's Liens or Owner Participant's Liens and (v) this
Operating Equipment Agreement shall terminate and, assuming the Facility Owner
and the Owner Participant have complied with all of their obligations under the
Operative Documents, Old Dominion shall cause the Agent to discharge the Liens
of the Loan Agreement and the Leasehold Mortgage and to execute, acknowledge and
deliver, and record and file (as appropriate), appropriate releases and all
other documents or instruments necessary or desirable to effect the foregoing,
all in form and substance reasonably satisfactory to the Facility Owner and at
the cost and expense of Old Dominion. Unless the Facility Owner shall have
elected to retain the Equipment Interest pursuant to Section 14.3 and the
Foundation Interest pursuant to Section 14.3 of the Operating Foundation
Agreement, Old Dominion may, at its election, revoke its notice of termination
on at least 30 days' prior notice to the Facility Owner, the Owner Trustee, the
Owner Participant and the Agent, in which event this Operating Equipment
Agreement shall continue with respect to the Equipment Interest and the
Operating Foundation Agreement shall continue with respect to the Foundation
Interest; PROVIDED, HOWEVER, that a notice of termination may be revoked on not
more than two occasions during the Term. The Facility Owner shall be under no
duty to solicit bids, to inquire into the efforts of Old Dominion to obtain bids
or otherwise take any action in arranging any such sale of the Facility Owner's
Unit 2 Interest other than, if the Facility Owner has not elected to retain the
Equipment Interest, to transfer the Facility Owner's Unit 2 Interest in
accordance with clause (iv) of the second preceding sentence. If, because of a
default by a prospective purchaser of its obligation to consummate a purchase of
the Facility Owner's Unit 2 Interest no sale shall occur on the Obsolescence
Termination Date, the notice of termination shall be deemed revoked and this
Operating Equipment Agreement shall continue as to the Equipment Interest (and
the Operating Foundation Agreement shall continue as to the Foundation Interest)
in full force and effect in accordance with its terms (without prejudice to Old
Dominion's right to exercise its rights under this Section 14 and Section 14 of
the Operating Foundation Agreement thereafter).
SECTION 15. END OF TERM OPTIONS.
SECTION 15.1 OLD DOMINION'S PURCHASE OPTION. Unless this Operating
Equipment Agreement shall have been previously terminated pursuant to Section
10, 13, 14, 17 or 18 hereof, at any time not more than forty-eight months nor
less than twenty-four months prior to the Expiration Date, Old Dominion shall
have the option, upon giving written notice to the Facility Owner, the Owner
Participant and Virginia Power, to irrevocably elect to purchase the Equipment
30
Interest on the Expiration Date for the Purchase Option Price in accordance
with this Section 15.1 (the "Purchase Option"). If Old Dominion shall have
exercised the Purchase Option under this Section 15.1, Old Dominion shall
become unconditionally obligated to pay (a) on the Expiration Date (i) the
initial installment of the Purchase Option Price in the amount of
$324,529,279.82, (ii) all amounts of Supplemental Payments (including, without
limitation, all costs and expenses of the Facility Owner, the Owner Participant,
the Agent and the Lenders and all sales, use, value added and other Taxes
covered by Section 8.2 of the Participation Agreement associated with the
Purchase Option) due and payable on the Expiration Date, and (iii) any unpaid
Basic Payment due before the Expiration Date and the Basic Payment due and
payable on the Expiration Date and (b) subsequent installments of the Purchase
Option Price in the amounts and on the dates set forth below:
Date Amount
---- ------
April 15, 2020 $28,780,326.18
June 15, 2020 $28,780,326.18
September 15, 2020 $28,780,326.18
December 15, 2020 $28,780,326.18
The covenant to pay the subsequent installments of the Purchase Option
Price in accordance with the preceding sentence shall survive the termination of
this Operating Equipment Agreement. Concurrently with the payment of the sums
specified in clause (a) of this Section 15.1 and clause (a) of Section 15.1 of
the Operating Foundation Agreement (w) Basic Payments for the Equipment Interest
shall cease to accrue, (x) Old Dominion shall cease to have any liability to the
Facility Owner with respect to the Equipment Interest, except for Supplemental
Payment obligations (including those under Sections 8.1 and 8.2 of the
Participation Agreement, the Tax Indemnity Agreement and the additional
installments of the Purchase Option Price payable in accordance with the second
sentence of this Section 15.1) surviving pursuant to the express terms of any
Operative Document or which have otherwise accrued but not been paid as of such
Expiration Date, (y) the Facility Owner will, by documents and instruments in
form and substance reasonably satisfactory to the Facility Owner, transfer the
Facility Owner's Unit 2 Interest to Old Dominion in accordance with this Section
15.1 and Section 15.1 of the Operating Foundation Agreement, Section 10 of the
Ground Lease and Sublease and Section 10.1 of each of the Head Agreements on an
"as is", "where is" and "with all faults" basis, without representations or
warranties other than a warranty as to the absence of Facility Owner's Liens or
Owner Participant's Liens and (z) this Operating Equipment Agreement shall
terminate and, assuming the Facility Owner and the Owner Participant have
complied with all of their obligations under the Operative Documents, Old
Dominion shall cause the Facility Owner to discharge the Liens of the Loan
Agreement and the Leasehold Mortgage and to execute and deliver appropriate
releases and all other documents or instruments necessary or desirable to effect
the foregoing, all to be prepared, filed and recorded (as appropriate) at the
cost and expense of Old Dominion. Old Dominion shall be permitted to exercise
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the Purchase Option provided in this Section 15.1 only in connection with its
simultaneous exercise of the Foundation Purchase Option with respect to
the Foundation Interest in accordance with Section 15.1 of the Operating
Foundation Agreement.
SECTION 15.2 FACILITY OWNER'S PREEMPTIVE ELECTION. If (a) this
Operating Equipment Agreement shall not have been previously terminated pursuant
to Section 10, 13, 14, 17 or 18 hereof, (b) Old Dominion shall not have elected
the Purchase Option pursuant to Section 15.1 and (c) Virginia Power shall not
have elected to exercise the purchase option pursuant to Section 6.3 of the Head
Equipment Agreement, the Facility Owner may, at its sole option, make a
preemptive election to require the return of the Equipment Interest by Old
Dominion in accordance with Section 5 of this Operating Equipment Agreement (the
"Preemptive Election"), such election to be made by the Facility Owner
delivering, within nine months following the last date for the exercise by
Virginia Power of the purchase option pursuant to Section 6.3 of the Head
Equipment Agreement, written notice to Old Dominion. If the Facility Owner shall
make the Preemptive Election, on the Expiration Date (t) Old Dominion shall pay
to the Facility Owner all Supplemental Payments (including all costs and
expenses of the Facility Owner, the Owner Trustee, the Owner Participant, the
Agent and the Lenders and all sales, use, value added and other Taxes covered by
Section 8.2 of the Participation Agreement associated with the exercise of the
Preemptive Election pursuant to this Section 15.2) due and payable on the
Expiration Date, (u) Old Dominion shall pay to the Facility Owner any unpaid
Basic Payment due before the Expiration Date, but shall not be required to pay
Termination Value, (v) Old Dominion shall cease to have any liability to the
Facility Owner with respect to the Equipment Interest, except for Supplemental
Payment obligations (including those under Sections 8.1 and 8.2 of the
Participation Agreement and the Tax Indemnity Agreement) surviving pursuant to
the express terms of any Operative Document or which have otherwise accrued but
not been paid as of the Expiration Date, (w) the Facility Owner shall pay all
principal and accrued interest on the Loan Certificates, (x) Old Dominion will
return the Equipment Interest to the Facility Owner in accordance with Section
5, and (y) this Operating Equipment Agreement shall terminate. The Facility
Owner shall be permitted to exercise the Preemptive Election provided in this
Section 15.2 only in connection with its simultaneous exercise of the similar
election with respect to the Foundation Interest in accordance with Section 15.2
of the Operating Foundation Agreement.
SECTION 15.3 OLD DOMINION'S EXERCISE OF SERVICE CONTRACT OPTION.
(a) If (i) this Operating Equipment Agreement shall not have
been previously terminated pursuant to Section 10, 13, 14, 17 or 18
hereof, (ii) Old Dominion shall not have elected the Purchase Option
pursuant to Section 15.1, (iii) Virginia Power shall not have elected
to exercise its purchase option pursuant to Section 6.3 of the Head
Equipment Agreement and (iv) the Facility Owner shall not have elected
the Preemptive Election pursuant to Section 15.2, Old Dominion shall
arrange for an Acceptable Power Purchaser to enter into a Power Sales
Agreement on the Expiration Date in accordance with this Section 15.3
(the "Service Contract Option").
(b) If Old Dominion shall have elected the Service Contract
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Option:
(i) Old Dominion shall arrange for an Acceptable Power
Purchaser to execute and deliver a Power Sales Agreement on
the Expiration Date. Not less than 6 months prior to the
Expiration Date, Old Dominion shall give the Owner
Participant notice of the proposed Power Purchaser, together
with financial and such other information as the Owner
Participant may reasonably request in order to determine
whether such proposed Power Purchaser constitutes an
Acceptable Power Purchaser. Old Dominion will execute and
deliver on the Expiration Date such documents including a
Transmission and Interconnection Agreement, at no cost to the
Facility Owner, as may be necessary to permit the Facility
Owner to deliver electric energy and capacity to the
transmission facilities connected to the Clover Power Station
so that the Facility Owner may arrange delivery thereof to
the Power Purchaser in accordance with the Power Sales
Agreement; and
(ii) The Facility Owner will cooperate with Old Dominion,
and Old Dominion will arrange a New Loan to be made to the
Facility Owner on the Expiration Date, such New Loan to be
substantially in accordance with the terms and conditions set
forth on Schedule 3 hereto. If Old Dominion shall be unable
to arrange a refinancing of the Loan Certificates within nine
months prior to the Expiration Date, the Facility Owner and
the Owner Participant shall have the right to retain an
independent debt placement agent at Old Dominion's expense to
arrange a New Loan. If a New Loan is not arranged, the Owner
Participant will have the right (but not the obligation) to
make the New Loan, in which case the New Loan will reflect a
rate based on prevailing market conditions, the maturity of
the New Loan, the credit risk reflecting the credit rating of
the Power Purchaser, Old Dominion and Virginia Power and the
terms of the Power Purchase Agreements, the Operating Agency
Agreement, the Access and Support Agreement, the Clover
Agreements and other relevant factors. The Facility Owner
will pay the outstanding Loan Certificates at their maturity
on the Expiration Date with the proceeds of the New Loan.
(c) The obligation by the Facility Owner and the Owner
Participant to enter into or accept, as the case may be, a Power Sales Agreement
and to consummate the Service Contract Option shall be subject to the
fulfillment or waiver, on or before the Expiration Date, to the satisfaction of
each such Person of the following conditions precedent (it being understood and
agreed that the agreement of each such Person to the foregoing matters shall not
be subject to such Person's own performance of or compliance with the provisions
hereof):
(i) each such Person shall have received such documents
or other evidence as it shall reasonably have requested with
respect to the prospective Power Purchaser to establish (A)
that such Person meets each of the requirements for an
Acceptable Power Purchaser and (B) the taking of all
requisite corporate or other similar actions and proceedings
in connection therewith;
(ii) each such Person shall have received an opinion of
counsel for the Power Purchaser, which counsel and opinion
shall be reasonably acceptable to each such Person, (A) to
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the effect that the Power Sales Agreement, and each
other agreement to which the Power Purchaser is a party
in connection with such Power Sales Agreement have been
duly authorized, executed and delivered by the Power
Purchaser and constitute the legal, valid and binding
obligations of the Power Purchaser and (B) covering such
other matters incident to such Power Sales Agreement
arrangement as each such Person may reasonably request;
(iii) the Owner Participant shall have received an
opinion from counsel for the Facility Owner, which counsel
and opinion shall be reasonably acceptable to the Owner
Participant, to the effect that (A) the Power Sales Agreement
and each other agreement to which the Facility Owner is a
party in connection with such Power Sales Agreement have been
duly authorized, executed and delivered by the Facility Owner
and constitute legal, valid and binding obligations of the
Facility Owner, and covering such other matters incident to
the transactions contemplated by such Power Sales Agreement
arrangement as the Owner Participant may reasonably request
and (B) the proposed transaction does not constitute a sale
of the Equipment Interest or the Foundation Interest for
federal income tax purposes;
(iv) the Facility Owner and the Owner Participant shall
each have received an opinion from counsel to Old Dominion,
which opinion and counsel shall be reasonably acceptable to
each such Person, to the effect that the Transmission and
Interconnection Agreement and each other agreement to which
Old Dominion is a party in connection with such Power Sales
Agreement have been duly authorized, executed and delivered
by Old Dominion and constitute legal, valid and binding
obligations of Old Dominion and covering such other matters
incident to the transactions contemplated by such Power Sales
Agreement arrangement as the Owner Participant may reasonably
request, and to the effect that by reason of the Facility
Owner entering into or performing its obligations pursuant to
a Power Sales Agreement, neither the Owner Participant, the
Facility Owner nor an Affiliate of either thereof will be in
violation of any Applicable Law or subject to any burdensome
regulation by any Governmental Entity;
(v) the Owner Participant shall have received the
following, in each case in form and substance reasonably
satisfactory to it:
(A) an incumbency certificate of the Power Purchaser
regarding the officers of the Power Purchaser authorized
to execute and deliver the documents referred to in this
Section 15.3 to which it is a party and any other
documents or agreements delivered in connection
therewith;
(B) certified copies of all documents evidencing the
corporate (or similar) actions of the Power Purchaser
including, without limitation, resolutions of the board
of directors of the Power Purchaser duly authorizing the
execution, delivery and performance by the Power
Purchaser of each of the documents referred to in this
34
Section 15.3 to which it is a party and the transactions
contemplated thereby;
(C) certified copies of the by-laws and certificate
of incorporation (or comparable organizational or
governing documents) of the Power Purchaser; and
(D) such other agreements, documents, certifications
and opinions as the Owner Participant shall reasonably
determine are necessary or appropriate in connection with
the consummation of such Power Sales Agreement;
(vi) the Power Sales Agreement shall be duly executed and
delivered by the Power Purchaser and shall have been
permitted to become effective or approved by FERC and any
other relevant federal or state regulatory agency or
agencies, if and to the extent required by Applicable Law,
and such other recordings, filings, financing statements,
continuation statements or other instruments shall have been
filed or made and all other actions shall have been taken as
are necessary or desirable in the opinion of the Owner
Participant and the Facility Owner to maintain all of the
Facility Owner's right, title and interest in and to the
Facility Owner's Unit 2 Interest;
(vii) the Minimum Capacity Payments and the Power Sales
Stipulated Loss Values under the Power Sales Agreement shall
have been adjusted upward or downward upon the Expiration
Date in a manner consistent with the methodology and
assumptions originally used in computing such factors and
values to reflect (a) the interest rate on the New Loan, and
(b) any adverse effect on the Owner Participant's
depreciation deductions if the Power Purchaser is a
tax-exempt entity; and
(viii) all other matters and proceedings taken in
connection with such transaction shall be reasonably
satisfactory to the Owner Participant and the Facility Owner.
(d) Old Dominion agrees to pay or reimburse, or cause to be
paid or reimbursed, on an After-Tax Basis, within 30 Business Days of the date
of demand, all costs and expenses, including reasonable legal fees and expenses
incurred by the Facility Owner, any Person making the New Loan on the Expiration
Date and the Owner Participant in connection with the implementation of the
Service Contract Option, whether or not any such transactions are consummated;
PROVIDED, HOWEVER, that, Old Dominion shall not be responsible for any such fees
and expenses incurred by any such Person if such transactions are not
consummated by reason of a breach by any such Person of its obligations
hereunder or under the other Operative Documents.
SECTION 15.4 USE OF PROCEEDS OF QUALIFYING SECURITY. If Old
Dominion shall have paid all other amounts payable by it under the Operative
Documents, it may elect to use the proceeds of the Qualifying Security on the
35
Expiration Date to satisfy the balance of its payment obligations under this
Section 15 and Section 15 of the Operating Foundation Agreement.
Notwithstanding the foregoing, if (i) Old Dominion elects the Purchase Option
or (ii) Virginia Power elects to purchase the Equipment Interest and the
Foundation Interest pursuant to Section 6.3 of the Head Equipment
Agreement and the Head Foundation Agreement, respectively, and the Facility
Owner and Virginia Power execute a contract for the sale of the Equipment
Interest and the Foundation Interest pursuant to Section 6.3 of the Head
Equipment Agreement and Section 6.3 of the Head Foundation Agreement, all
unpaid installments of the Purchase Option Price and the Foundation Purchase
Option Price payable by Old Dominion under Section 15.3 or 15.5, as the case may
be, shall be secured by the portion of the Qualifying Security necessary to
satisfy such unpaid installments of the Purchase Option Price and the Foundation
Purchase Option Price.
SECTION 15.5 OBLIGATION TO PAY AMOUNT EQUAL TO PRINCIPAL AND INTEREST
ON LOAN CERTIFICATES UPON VIRGINIA POWER DEFAULT. If (i) Virginia Power shall
elect to purchase the Equipment Interest and the Foundation Interest in
accordance with Section 6.3 of the Head Equipment Agreement and Section 6.3 of
the Head Foundation Agreement, respectively, (ii) the Facility Owner and
Virginia Power shall execute a contract for the sale of the Equipment Interest
and the Foundation Interest to Virginia Power pursuant to Section 6.3 of the
Head Equipment Agreement and Section 6.3 of the Head Foundation Agreement and
(iii) Virginia Power shall default on its obligation to pay the initial
installment of the Purchase Option Price or the Foundation Purchase Option Price
on the Expiration Date pursuant to such purchase contract, Old Dominion shall,
within 30 days of the Expiration Date, pay an amount equal to the installment of
the unpaid portion of the Purchase Option Price and the Foundation Purchase
Option Price due on the Expiration Date, plus interest on such amount at the
Overdue Rate from the Expiration Date to such date of payment. Old Dominion also
agrees to pay any other installments of the Purchase Option Price or the
Foundation Purchase Option Price if not paid by Virginia Power at the time
required by the contract or contracts for sale of the Equipment Interest and the
Foundation Interest, respectively, executed by the Facility Owner and Virginia
Power. Upon payment by Old Dominion of any amount required by this Section 15.5,
Old Dominion shall be subrogated to the rights of the Facility Owner under such
contract for sale with Virginia Power, to the extent of Old Dominion's payment.
In accordance with Section 15.4, Old Dominion may use the proceeds of the
Qualifying Security to satisfy any of its obligations under this Section 15.5.
SECTION 16. EVENTS OF DEFAULT.
The following events shall constitute "Event of Defaults" hereunder
(whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Entity):
(a) Old Dominion shall fail to make any payment of Basic
Payment within five Business Days after the same shall have become due;
or
36
(b) Old Dominion shall fail to make any payment of
Supplemental Payment (other than the Purchase Option Price), after the
same shall have become due and such failure shall continue unremedied
for a period of 10 Business Days after receipt by Old Dominion of
written notice of such failure from the Facility Owner or the Owner
Participant; or
(c) any representation or warranty made by Old Dominion in
the Operative Documents (other than the Tax Indemnity Agreement) shall
be untrue, inaccurate or misleading in any material respect and, if
capable of remedy, no action to cure has commenced within 30 days after
notice or, if such action has been taken and Old Dominion is diligently
pursuing such cure, such action has not succeeded within a period of
180 days after such notice; or
(d) Old Dominion shall have failed to perform or observe any
material covenant, obligation or agreement to be performed or observed
by it under any Operative Document (other than any covenant, obligation
or agreement contained in the Tax Indemnity Agreement or Section 12 of
the Participation Agreement or any covenants, obligations or agreements
referred to in clauses (a), (b), (e), (f) and (i) of this Section 16 or
clauses (a), (b), (e), (f) and (i) of Section 16 of the Operating
Foundation Agreement) in any material respect and, if capable of
remedy, no action to cure has commenced within 30 days after notice or,
if such action has been taken and Old Dominion is diligently pursuing
such cure, such action has not succeeded within a period of 180 days
after such notice; PROVIDED, HOWEVER, that in the case of Old
Dominion's obligation set forth in clause (c) of Section 7.1 of this
Operating Equipment Agreement, if, to the extent and for so long as a
test, challenge, appeal or proceeding for review of such compliance
shall be prosecuted in good faith by Old Dominion or the Clover Unit 2
Operator under the Clover Agreements, the failure by Old Dominion to
comply with such requirement shall not constitute an Event of Default
hereunder if, but only if, such test challenge, appeal or proceeding
shall not involve any danger of (i) foreclosure, sale, forfeiture or
loss of, or imposition of a Lien on, any part of Clover Unit 2, the
Unit 2 Site or the Common Facilities Site or the impairment of the use,
operation or maintenance of Clover Unit 2, the Unit 2 Site or the
Common Facilities Site in any material respect, or (ii) any criminal
liability being incurred or any material adverse effect on the Facility
Owner, the Owner Trustee, the Owner Participant, the Agent or any
Lender (in each case in the reasonable opinion of such Person)
including, without limitation, subjecting the Facility Owner, the Owner
Trustee, or the Owner Participant to regulation as a public utility
under Applicable Law; and PROVIDED, FURTHER, in the case of Old
Dominion's obligation set forth in clause (c) of Section 7.1 of this
Operating Equipment Agreement, if the noncompliance is not of a type
that can be immediately remedied, the failure to comply shall not be an
Event of Default hereunder if Old Dominion is taking all reasonable
action to remedy such noncompliance and if, but only if, such
noncompliance shall not involve any danger (in each case in the
reasonable opinion of such Person) described in clause (i) or (ii) of
the preceding proviso; and PROVIDED, FURTHER, such noncompliance, or
such test, challenge, appeal or proceeding to review shall not, unless
Old Dominion has irrevocably elected the Purchase Option pursuant to
37
Section 15.1, extend beyond a date that is 18 months prior to the
scheduled expiration of the Term; or
(e) Old Dominion shall fail to observe or perform its
obligation to maintain the insurance required by Section 11; or
(f) the Expiration Date shall have occurred and none of the
following events shall have occurred on or prior to such date: (i) Old
Dominion shall have elected the Purchase Option and all of the
provisions of Section 15.1 shall have been complied with, or (ii) Old
Dominion shall have elected the Service Contract Option, all of the
provisions of Section 15.3 shall have been complied with and the Loan
Certificates shall have been repaid or (iii) the Facility Owner shall
have elected the Preemptive Elective and Old Dominion shall have
complied with all of its obligations under Section 15.2 and the Loan
Certificates shall have been paid; or
(g) an "Event of Default" shall occur and be continuing under
the Old Dominion Indenture and the Indenture Trustee shall have (x)
declared the principal of and interest on Old Dominion's Bonds to be
immediately due and payable, (y) taken possession of Clover Unit 2
pursuant to Section 9.03 of the Old Dominion Indenture or (z) commenced
an action pursuant to Section 9.05 of the Old Dominion Indenture to
sell Clover Unit 2; or
(h) an "Event of Default" shall occur, in consequence of
which the "Ownership Interest" of Old Dominion shall be purchased or
decreased, (i) under the Clover Operating Agreement pursuant to Section
13.03 or 13.04 of the Clover Operating Agreement, or (ii) under the
Clover Ownership Agreement pursuant to Section 15.04 of the Clover
Ownership Agreement; or
(i) Old Dominion shall have failed to observe or perform its
obligation set forth in Sections 7.6, 7.7, 7.8 or 7.9 of the
Participation Agreement and the Owner Participant shall have given
written notice to Old Dominion and the Facility Owner declaring an
Event of Default under this paragraph (i); or
(j) an "Event of Default" under the Operating Foundation
Agreement shall have occurred and be continuing; or
(k) Old Dominion shall (i) commence a voluntary case or other
proceeding seeking relief under Title 11 of the Bankruptcy Code or
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect, or apply for or consent to the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, or (ii) consent to, or fail
to controvert in a timely manner, any such relief or the appointment of
or taking possession by any such official in any voluntary case or
other proceeding commenced against it, or (iii) file an answer
admitting the material allegations of a petition filed against it in
38
any such proceeding, or (iv) make a general assignment for the benefit
of creditors; or
(l) an involuntary case or other proceeding shall be
commenced against Old Dominion seeking (i) liquidation, reorganization
or other relief with respect to it or its debts under Title 11 of the
Bankruptcy Code or any bankruptcy, insolvency or other similar law now
or hereafter in effect, or (ii) seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official, or (iii) the
winding-up or liquidation of Old Dominion; and such involuntary case of
other proceeding shall remain undismissed and unstayed for a period of
60 days; or
(m) Old Dominion shall admit in writing its inability to pay
its debts generally as they become due.
SECTION 17. REMEDIES.
SECTION 17.1 REMEDIES FOR EVENT OF DEFAULT. Subject to the penultimate
sentence of Section 3.7 with respect to the Events of Default set forth in
Section 16(a) and 16(b) or an Event of Default set forth in Section 16(k) in
consequence of an Event of Default set forth in Section 16(a) or 16(b) of the
Operating Foundation Agreement, upon the occurrence of any Event of Default and
at any time thereafter so long as the same shall be continuing, the Facility
Owner may, at its option, declare this Operating Equipment Agreement to be in
default by a written notice to Old Dominion; PROVIDED that upon the occurrence
of an Event of Default described in paragraph (k) or (l) of Section 16, this
Operating Equipment Agreement shall automatically be deemed to be in default
without the need for giving any notice; and at any time thereafter, so long as
Old Dominion shall not have remedied all outstanding Events of Default, the
Facility Owner may do one or more of the following as the Facility Owner in its
sole discretion shall elect, to the extent permitted by, and subject to
compliance with any mandatory requirements of, Applicable Law then in effect:
(a) proceed by appropriate court action or actions, either at
law or in equity, to enforce performance by Old Dominion of the
applicable covenants and terms of this Operating Equipment Agreement or
to recover damages for breach thereof;
(b) by notice in writing to Old Dominion, terminate this
Operating Equipment Agreement and Old Dominion's Unit 2 Interest
whereupon all right of Old Dominion to the possession and use of the
Equipment Interest under this Operating Equipment Agreement shall
absolutely cease and terminate but Old Dominion shall remain liable as
hereinafter provided; and thereupon, the Facility Owner may demand that
Old Dominion, and Old Dominion shall, upon written demand of the
Facility Owner and at Old Dominion's expense, forthwith return
constructive possession of the Equipment Interest to the Facility Owner
or its order in the manner and condition required by, and otherwise in
accordance with all of the provisions of Sections 5.2 and 5.3, except
those provisions relating to periods of notice; and the Facility Owner
may thenceforth hold, possess and enjoy the same free from any right of
39
Old Dominion, or its successor or assigns, to use the Equipment
Interest for any purpose whatever;
(c) sell the Facility Owner's Unit 2 Interest at public or
private sale, as the Facility Owner may determine, free and clear of
any rights of Old Dominion under this Operating Equipment Agreement and
without any duty to account to Old Dominion with respect to such sale
or for the proceeds thereof (except to the extent required by paragraph
(e) below if the Facility Owner elects to exercise its rights under
said paragraph and by Applicable Law), in which event Old Dominion's
obligation to pay Basic Payment hereunder due for any periods
subsequent to the date of such sale shall terminate (except to the
extent that Basic Payments and other Equipment Payments are to be
included in computations under paragraph (e) or (f) below if the
Facility Owner elects to exercise its rights under either of said
paragraphs);
(d) hold, keep idle or lease to others the Facility Owner's
Unit 2 Interest as the Facility Owner in its sole discretion may
determine, free and clear of any rights of Old Dominion under this
Operating Equipment Agreement and without any duty to account to Old
Dominion with respect to such action or inaction or for any proceeds
with respect thereto, except that Old Dominion's obligation to pay
Basic Payment with respect to the Equipment Interest due for any
periods subsequent to the date upon which Old Dominion shall have been
deprived of possession and use of the Equipment Interest pursuant to
this Section 17 shall be reduced by the net proceeds, if any, received
by the Facility Owner from conveying the Facility Owner's Unit 2
Interest (and allocable to the Equipment Interest in accordance with
the definition of Fair Market Sales Value) to any Person other than Old
Dominion;
(e) whether or not the Facility Owner shall have exercised,
or shall thereafter at any time exercise, any of its rights under
paragraph (b) above with respect to the Facility Owner's Unit 2
Interest, the Facility Owner, by written notice to Old Dominion
specifying a Termination Date that shall be not earlier than 10 days
after the date of such notice, may demand that Old Dominion pay to the
Facility Owner, and Old Dominion shall pay to the Facility Owner, on
the Termination Date specified in such notice, any unpaid Basic Payment
due before such Termination Date and, if such Termination Date shall be
a Payment Date, any Basic Payment (to the extent payable in arrears)
due and payable on such Payment Date, plus as liquidated damages for
loss of a bargain and not as a penalty (in lieu of the Basic Payment
due after the Termination Date specified in such notice), (i) an amount
equal to the excess, if any, of the Termination Value computed as of
the Termination Date specified in such notice over the Fair Market
Sales Value of the Facility Owner's Unit 2 Interest allocable to the
Equipment Interest in accordance with the definition of Fair Market
Sales Value as of the Termination Date specified in such notice; or
(ii) an amount equal to the Termination Value computed as of the
Termination Date specified in such notice (and, upon payment of such
Termination Value by Old Dominion pursuant to this clause (ii) and all
other Equipment Payments then due and payable by Old Dominion, the
Facility Owner will forthwith transfer the Facility Owner's Unit 2
Interest to Old Dominion in accordance with this Section 17.1(e),
40
Section 17.1(e) of the Operating Foundation Agreement, Section 10 of
the Ground Lease and Sublease and Section 10.1 of each of the Head
Agreements on an "as is", "where is" and "with all faults" basis,
without representation or warranty other than a warranty as to the
absence of Facility Owner's Liens and Owner Participant's Liens, all of
its interest in the Facility Owner's Unit 2 Interest and, assuming the
Facility Owner and the Owner Participant are in compliance with all of
their obligations under the Operative Documents, Old Dominion shall
cause the Agent to discharge the Liens of the Loan Agreement and the
Leasehold Mortgage and to execute, acknowledge and deliver, and record
and file (as appropriate), appropriate releases and all other documents
or instructions necessary or desirable to effect the foregoing, all in
form and substance reasonably satisfactory to the Facility Owner and at
the cost and expense of Old Dominion); and
(f) if the Facility Owner shall have sold the Facility
Owner's Unit 2 Interest pursuant to paragraph (c) above, the Facility
Owner, in lieu of exercising its rights under paragraph (e) above with
respect to the Facility Owner's Unit 2 Interest may, if it shall so
elect, demand that Old Dominion pay to the Facility Owner, and Old
Dominion shall pay to the Facility Owner, as liquidated damages for
loss of a bargain and not as a penalty (in lieu of the Basic Payment
due for any periods subsequent to the date of such sale), any unpaid
Basic Payment due before the date of such sale and, if that date is a
Payment Date, the Basic Payment due on that date (to the extent payable
in arrears), or, if that date is not a Payment Date, the daily
equivalent of Basic Payment for the period from the preceding Payment
Date to the date of such sale (to the extent payable in arrears), plus
the amount, if any, by which the Termination Value computed as of the
Payment Date next preceding the date of such sale or, if such sale
occurs on a Payment Date, then computed as of such Payment Date,
exceeds the net proceeds of such sale, such sales proceeds apportioned
between the Equipment Interest and the Foundation Interest in
accordance with the definition of Fair Market Sales Value.
In addition, Old Dominion shall be liable, except as otherwise provided
above, for any and all unpaid Equipment Payments due hereunder before or during
the exercise of any of the foregoing remedies, and, on an After-Tax Basis, for
legal fees and other costs and expenses incurred by reason of the occurrence of
any Event of Default or the exercise of the Facility Owner's remedies with
respect thereto, including the repayment in full of any costs and expenses
necessary to be expended in connection with the return of the Equipment Interest
in accordance with Sections 5.2 and 5.3 hereof, including, without limitation,
any costs and expenses incurred by the Facility Owner, the Owner Participant,
the Agent or any Lender in connection with retaking constructive possession of,
or in repairing, the Equipment Interest in order to cause it to be in compliance
with all maintenance standards imposed by this Operating Equipment Agreement.
SECTION 17.2 CUMULATIVE REMEDIES. The remedies in this Operating
Equipment Agreement provided in favor of the Facility Owner shall not be deemed
exclusive, but shall be cumulative and shall be in addition to all other
remedies in its favor existing at law or in equity. To the extent permitted by
Applicable Law, Old Dominion hereby waives any rights now or hereafter conferred
41
by statute or otherwise which may require the Facility Owner to sell, lease or
otherwise use the Equipment Interest or any Component thereof in mitigation of
Facility Owner's damages as set forth in this Section 17 or which may
otherwise limit or modify any of Facility Owner's rights and remedies in this
Section 17.
SECTION 17.3 NO DELAY OR OMISSION TO BE CONSTRUED AS WAIVER. No delay
or omission to exercise any right, power or remedy accruing to the Facility
Owner upon any breach or default by Old Dominion under this Operating Equipment
Agreement shall impair any such right, power or remedy of the Facility Owner,
nor shall any such delay or omission be construed as a waiver of any breach or
default, or of any similar breach or default hereafter occurring; nor shall any
waiver of a single breach or default be deemed a waiver of any subsequent breach
or default.
SECTION 18. OLD DOMINION TERMINATION OPTION FOR APPEAL OF FERC
ORDERS.
SECTION 18.1 OLD DOMINION OPTION TO TERMINATE. If, on or prior to
August 2, 1996, (a) an appeal shall be filed (including by post-order
intervention) of either FERC Order and (b) Old Dominion shall give notice to the
Facility Owner, the Owner Trustee, the Owner Participant and the Agent of such
appeal, upon not less than one day's prior written notice to the Facility Owner,
the Owner Participant and the Agent given not later than August 4, 1996, Old
Dominion shall have the option to acquire the Facility Owner's Unit 2 Interest
and terminate this Operating Equipment Agreement on the second day following
such notice, upon payment to the Facility Owner of an amount equal to the sum of
(i) Equipment Interest Cost, (ii) all Transaction Costs paid or incurred by the
Owner Participant and (iii) interest at the Debt Rate on the amounts in clauses
(i) and (ii) from, and including, the Closing Date to, but excluding, such date
of termination. Old Dominion shall be permitted to exercise the option provided
in this Section 18 only if it shall simultaneously exercise the termination
option provided by Section 18 of the Operating Foundation Agreement.
SECTION 18.2 PROCEDURE FOR EXERCISE OF TERMINATION OPTION. If Old
Dominion shall have exercised its option under Section 18.1, on the date
specified in Old Dominion's notice of such exercise, Old Dominion shall pay to
the Facility Owner (a) the amount specified in Section 18.1, plus (b) all
amounts of Supplemental Payments (including, without limitation, all costs and
expenses of the Facility Owner, the Owner Participant, the Agent and the Lenders
and all sales, use, value added and other Taxes covered by Section 8.2 of the
Participation Agreement associated with the exercise of the termination option
pursuant to this Section 18) due and payable on or prior to such Termination
Date, and (c) any unpaid Basic Payments due before such Termination Date.
Concurrently with the payment of all sums specified in this Section 18.2 and
Section 18.2 of the Operating Foundation Agreement, (1) Old Dominion shall cease
to have any liability to the Facility Owner with respect to the Equipment
Interest, except for Supplemental Payment obligations (including, without
limitation, Section 8.1 and 8.2 of the Participation Agreement and the Tax
Indemnity Agreement) surviving pursuant to the express terms of any Operative
Document or which have otherwise accrued but not been paid as of such
42
Termination Date, (2) the Facility Owner will prepay the Loan Certificates
pursuant to Section 2.10 of the Loan Agreement, (3) the Facility Owner will
execute, acknowledge and deliver to Old Dominion, and record and file (where
appropriate), all at Old Dominion's cost and expense, each in form and substance
reasonably satisfactory to the Facility Owner, (x) a release or termination of
this Operating Equipment Agreement, the Operating Foundation Agreement, the
Ground Lease and Sublease and the Clover Agreements Assignment and (y) surrender
of the Facility Owner's Unit 2 Interest to Old Dominion in accordance with this
Section 18, Section 18 of the Operating Foundation Agreement, Section 10 of the
Ground Lease and Sublease and Section 10.1 of each of the Head Agreements on an
"as is", "where is", "with all faults" basis, without representations or
warranties other than a warranty as to the absence of Facility Owner's Liens and
Owner Participant's Liens and (4) this Operating Equipment Agreement shall
terminate and, assuming the Facility Owner and the Owner Participant have
complied with all of their obligations under the Operative Documents, Old
Dominion shall cause the Agent to discharge the Liens of the Loan Agreement and
the Leasehold Mortgage and to execute, acknowledge and deliver and record and
file (where appropriate), appropriate releases and all other documents or
instruments necessary or desirable to effect the foregoing, all in form and
substance reasonably satisfactory to the Facility Owner and at the cost and
expense of Old Dominion.
SECTION 19. OLD DOMINION'S RIGHT TO SUBLEASE.
Old Dominion will not, without the prior written consent of the
Facility Owner and the Agent, relinquish use, possession or control of the
Equipment Interest, or any part thereof, PROVIDED that, unless a Payment
Default, a Bankruptcy Default or an Event of Default shall have occurred and be
continuing, no consent of the Facility Owner, the Owner Participant or the Agent
shall be required for any sublease of the Equipment Interest if:
(a) the sublessee is a solvent corporation not subject to any
bankruptcy proceeding;
(b) such sublease does not extend beyond the date 18 months
prior to the scheduled expiration of the Term (unless Old Dominion has
exercised the Purchase Option) and is expressly subject and subordinate
to the Head Equipment Agreement and this Operating Equipment Agreement;
(c) Old Dominion remains fully and primarily liable for all of
its obligations under this Operating Equipment Agreement and the
other Operative Documents as if such sublease had not occurred;
(d) all terms and conditions of the Head Equipment Agreement
and this Operating Equipment Agreement and the other Operative
Documents remain in effect;
(e) entering into such sublease is permitted by the Clover
Agreements, the Pollution Control Assets Lease Documents and the Old
Dominion Indenture;
43
(f) such sublease prohibits further subletting without the prior
written consent of the Facility Owner and the Agent; and
(g) such sublessee shall be a sublessee of the Foundation
Interest in accordance with Section 19 of the Operating Foundation
Agreement, a sublessee of the Ground Interest in accordance with the
provisions of the Ground Lease and Sublease and an assignee of the
Assigned Clover Interests in accordance with the provisions of the
Clover Agreements Assignment.
As a condition precedent to such sublease, Old Dominion shall provide
the Facility Owner and the Agent with all documentation in respect of such
sublease and opinion of counsel to Old Dominion to the effect that such sublease
complies with the provisions of this Section 19 (such documentation, counsel and
opinion to be reasonably satisfactory to the Facility Owner and the Owner
Participant).
SECTION 20. FURTHER ASSURANCES.
Old Dominion, at its own cost and expense, will duly execute and
deliver to the Facility Owner such further documents and assurances and take
such further action as the Facility Owner may from time to time reasonably
request in order to establish and protect the rights and remedies created in
favor of the Facility Owner hereunder. Old Dominion, at its own cost and
expense, will cause such continuation statements in respect of financing
statements under the Uniform Commercial Code contemplated by Section 7.10 of the
Participation Agreement or Section 10.3 hereof to be made from time to time as
requested by the Facility Owner as shall be necessary to maintain the perfection
of the security interest contemplated thereby.
SECTION 21. FACILITY OWNER'S RIGHT TO PERFORM.
If Old Dominion fails to make any payment required to be made by it
hereunder (other than Supplemental Payments in respect of the Purchase Option
Price) or under the Old Dominion Indenture or the Clover Agreements or fails to
perform or comply with any of its other agreements contained herein or in the
Old Dominion Indenture or the Clover Agreements after notice to Old Dominion and
failure of Old Dominion to so perform or comply within 30 days thereafter, the
Facility Owner or the Owner Participant may itself make such payment or perform
or comply with such agreement in a reasonable manner, but shall not be obligated
hereunder to do so, and the amount of such payment and of the reasonable
expenses of the Facility Owner or the Owner Participant incurred in connection
with such payment or the performance of or compliance with such agreement, as
the case may be, together with interest thereon at the Overdue Rate, to the
extent permitted by Applicable Law, shall be deemed to be Supplemental Payment,
payable by Old Dominion to the Facility Owner on demand.
44
SECTION 22. NOTICES.
Unless otherwise expressly specified or permitted by the terms hereof,
all communications and notices provided for herein to a party hereto shall be in
writing or by a telecommunications device capable of creating a written record,
and any such notice shall become effective (a) upon personal delivery thereof,
including, without limitation, by overnight mail or courier service, (b) in the
case of notice by United States mail, certified or registered, postage prepaid,
return receipt requested, upon receipt thereof, or (c) in the case of notice by
such a telecommunications device, upon transmission thereof, PROVIDED such
transmission is promptly confirmed by either of the methods set forth in clauses
(a) and (b) above, in each case addressed to such party at its address set forth
below or at such other address as such party may from time to time designate by
written notice to the other party hereto:
If to the Facility Owner:
Clover Unit 2 Generating Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With a copy to the Owner Participant:
EPC Corporation
c/o Chrysler Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: President
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
If to Old Dominion:
Old Dominion Electric Cooperative
P. O. Xxx 0000
Xxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Vice President of Accounting and Finance
Fax No.: (000) 000-0000
Confirmation No.: (000) 000-0000
45
A copy of all communications and notices provided for herein shall be sent by
the party giving such communication or notice to Virginia Power at:
Virginia Electric and Power Company
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
SECTION 23. SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS.
Any moneys received by the Facility Owner pursuant to Section 10.4 or
pursuant to the Payment Undertaking Agreement following the purchase by the
Owner Participant or its designee of the Loan Certificates pursuant to Section
4.8 of the Loan Agreement shall, until paid to Old Dominion as provided in
Section 10.4 (with respect to amounts received pursuant to Section 10.4), be
held by the Facility Owner as security for Old Dominion's obligations under this
Operating Equipment Agreement and invested in Permitted Investments by the
Facility Owner (at the sole risk of Old Dominion) from time to time as directed
in writing by Old Dominion if such investments are reasonably available for
purchase. Any gain (including interest received) realized as the result of any
such Permitted Investment (net of any fees, commissions, taxes and other
expenses, if any, incurred in connection with such Permitted Investment) shall
be (i) in the case of amounts received pursuant to Section 10.4, applied or
remitted to Old Dominion in the same manner as the principal invested and (ii)
in the case of amounts received pursuant to the Payment Undertaking Agreement in
the circumstances described in the first sentence of this Section, applied to
Old Dominion's obligation to make Basic Payments.
SECTION 24. SECURITY FOR FACILITY OWNER'S OBLIGATION TO THE
LENDERS.
In order to secure all amounts payable by and all obligations to be
performed by the Facility Owner under the Loan Agreement, the Facility Owner
will assign in the Loan Agreement to the Agent for its benefit and the ratable
benefit of the Lenders its rights under this Operating Equipment Agreement (as
well as all the components of the Facility Owner's Unit 2 Interest) and grant
security interests in favor of the Agent in all of the Facility Owner's right,
title and interest in and to the Equipment Interest and its interest in this
Operating Equipment Agreement (as well as all the components of the Facility
Owner's Unit 2 Interest) (other than in all cases Excepted Payments and Excepted
Rights). Old Dominion hereby consents to such assignment and to the creation of
such security interests and acknowledges receipt of copies of the Loan
Agreement, it being understood that such consent shall not affect any
requirement or the absence of any requirement for any consent under any other
circumstances. To the extent, if any, that this Operating Equipment Agreement
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in this
Operating Equipment Agreement may be created through the transfer or possession
46
of any counterpart hereof other than the original counterpart, which shall be
identified as the counterpart containing the receipt therefor executed by the
Agent on the signature page thereof. Old Dominion hereby acknowledges
receipt of due notice that the Facility Owner's interest in this Operating
Equipment Agreement and all other components of the Facility Owner's Unit 2
Interest will be assigned to the Agent as security pursuant to the Loan
Agreement to the extent provided in the Loan Agreement. Unless and until Old
Dominion shall have received written notice from the Agent that the Liens of the
Loan Agreement and the Leasehold Mortgage have been terminated, the Agent shall
have the right to exercise the rights of the Facility Owner under this Operating
Equipment Agreement to the extent set forth in and subject in each case to the
exceptions set forth in the Loan Agreement.
SECTION 25. MISCELLANEOUS.
SECTION 25.1 GOVERNING LAW. This Operating Equipment Agreement shall
be in all respects governed by and construed in accordance with the laws of
the state of New York including all matters of construction, validity
and performance.
SECTION 25.2 SEVERABILITY. Whenever possible, each provision of
this Operating Equipment Agreement shall be interpreted in such manner as
to be effective and valid under Applicable Law, but if any provision of this
Operating Equipment Agreement shall be prohibited by or invalid under Applicable
Law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Operating Equipment Agreement.
SECTION 25.3 HEADINGS AND TABLE OF CONTENTS. The headings of the
sections of this Operating Equipment Agreement and the Table of Contents are
inserted for purposes of convenience only and shall not be construed to affect
the meaning or construction of any of the provisions hereof.
SECTION 25.4 SUCCESSORS AND ASSIGNS. (a) This Operating Equipment
Agreement shall be binding upon and shall inure to the benefit of, and shall be
enforceable by, the parties hereto and their respective successors and assigns
as permitted by and in accordance with the terms hereof.
(b) Except as expressly provided herein or in the other Operative
Documents, neither party hereto may assign its interests herein without the
consent of the other party hereto.
SECTION 25.5 "TRUE LEASE". It is the intent of the parties to this
Operating Equipment Agreement that it be, and this Operating Equipment Agreement
shall be, a "true lease," and that, notwithstanding the fact that legal title to
the Retained Assets is vested in the Co-Owners, as tenants-in-common, and legal
title to the Pollution Control Assets is vested in the Pollution Control Assets
Lessor and Virginia Power, as tenants in common, the interest of the Facility
Owner under the Head Equipment Agreement shall cause the Facility Owner to be
the owner of the Equipment Interest for all United States income tax purposes,
47
this Operating Equipment Agreement conveying to Old Dominion no right, title or
interest in the Equipment Interest except as "lessee" of the Equipment Interest.
SECTION 25.6 IDENTIFICATION. Old Dominion will, at its own cost
and expense, cause Clover Unit 2 to be legibly, conspicuously and
permanently marked, throughout the Term in a reasonably prominent location,
with a plate or other marking, which plate or other marking shall set forth
the following legend:
"SO MUCH OF THIS PROPERTY AS CONSTITUTES THE
EQUIPMENT INTEREST, AS DESCRIBED IN THE HEAD EQUIPMENT
AGREEMENT, DATED AS OF JULY 1, 1996, BETWEEN CLOVER
UNIT 2 GENERATING TRUST AND OLD DOMINION ELECTRIC
COOPERATIVE, IS SUBJECT TO SUCH TRUST'S INTEREST UNDER
SUCH AGREEMENT."
In addition, so long as the Liens of the Loan Agreement and the Leasehold
Mortgage have not been terminated, the following inscription shall be included
with the first sentence of the foregoing: "AND IS SUBJECT TO THE LIEN IN FAVOR
OF UTRECHT-AMERICA FINANCE CO., AS THE AGENT UNDER THE LOAN AGREEMENT REFERRED
TO THEREIN."
SECTION 25.7 AMENDMENTS AND WAIVERS. No term, covenant, agreement or
condition of this Operating Equipment Agreement may be terminated, amended or
compliance therewith waived (either generally or in a particular instance,
retroactively or prospectively) except by an instrument or instruments in
writing executed by each party hereto (and, also, in connection with any
termination of, or amendment to those provisions for which Virginia Power is an
intended beneficiary, approved in writing by Virginia Power).
SECTION 25.8 AGREEMENT REGARDING EQUIPMENT. The parties hereto
understand and acknowledge that the Unit 2 Equipment and the Common Facilities
Equipment have been constructively severed from the Real Property by the
Severance Agreements and intend that all such equipment be treated as personal
property. However, should it be determined by a court of competent jurisdiction
that (notwithstanding the foregoing) any of the equipment constituting Unit 2
Equipment or Common Facilities Equipment is an interest in real property for
purposes of Virginia Code Section 55-96, the parties hereto agree that such
equipment shall not be part of the Unit 2 Equipment or the Common Facilities
Equipment and shall not be subject to this Operating Equipment Agreement, but
shall constitute a part of the Unit 2 Foundation or the Common Facilities
Foundation, as the case may be, and shall be subject to and conveyed for the
term specified herein under the Operating Foundation Agreement.
SECTION 25.9 SURVIVAL. All warranties, representations, indemnities
and covenants made by either party hereto, herein or in any certificate or
other instrument delivered by either such party or on the behalf of such party
under this Operating Equipment Agreement, shall be considered to have been
relied upon by the other party hereto and shall survive the consummation of the
48
transactions contemplated hereby on the Closing Date regardless of any
investigation made by either party or on behalf of such party.
SECTION 25.10 COUNTERPARTS. This Operating Equipment Agreement may be
executed by the parties hereto in separate counterparts, each of which, subject
to Section 24, when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 25.11 EFFECTIVENESS. This Operating Equipment Agreement has
been dated as of the date first above written for convenience only. This
Operating Equipment Agreement shall be effective on the date of execution and
delivery by each of Old Dominion and the Facility Owner.
SECTION 25.12 LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but solely
as trustee of Clover Unit 2 Generating Trust (the "Trust") under the Trust
Agreement, in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose for binding only the Trust, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
or by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or any other Operative Documents.
49
IN WITNESS WHEREOF, the Facility Owner and Old Dominion have caused
this Operating Equipment Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized.
CLOVER UNIT 2 GENERATING TRUST
By Wilmington Trust Company, not
in its individual capacity but
solely as Owner Trustee under
the Trust Agreement
By:/s/ XXXXXX X. XXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
OLD DOMINION ELECTRIC COOPERATIVE
By:/s/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: July 31, 1996
CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS OPERATING
EQUIPMENT AGREEMENT HAVE BEEN ASSIGNED TO AND ARE SUBJECT TO A FIRST PRIORITY
SECURITY INTEREST IN FAVOR OF THE UNDERSIGNED, AS AGENT, UNDER THE LOAN AND
SECURITY AGREEMENT, DATED AS OF JULY 1, 1996. THIS AGREEMENT HAS BEEN EXECUTED
IN SEVERAL COUNTERPARTS. ONLY THE ORIGINAL COUNTERPART CONTAINS THE RECEIPT
THEREFOR EXECUTED BY THE UNDERSIGNED, ON THE SIGNATURE PAGES THEREOF. SEE
SECTION 24 HEREOF FOR INFORMATION CONCERNING THE RIGHTS OF THE HOLDERS OF THE
VARIOUS COUNTERPARTS THEREOF.
Receipt of this original counterpart of this Operating Equipment
Agreement is hereby acknowledged on this ___ day of _____, 1996.
UTRECHT-AMERICA FINANCE CO.
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
APPENDIX A
TO
OPERATING
EQUIPMENT AGREEMENT
DEFINITIONS
This Appendix A has been filed separately. See Appendix A to Exhibit 10.46 to
Old Dominion's Form 10-K for the year ended December 31, 1996.
EXHIBIT A-1
to
Operating
Eqipment Agreement
DESCRIPTION OF UNIT 2 EQUIPMENT
All those certain assets at or on the Unit 2 Site (excluding,
the Xxxx 0 Foundation) and all replacements or substitutions thereto, including
all those certain parts and items of equipment identified on Schedule 1 (which
is not intended to limit the generality of the foregoing definition to the
assets identified therein) attached hereto, together with all auxiliary and
support items, including all valves, backflow preventers, breakdown orifices,
exhaust heads, expansion joints, flexible hoses, gage glasses, relief valves,
sight flow indicators, strainers, traps, local switch stations, transducers,
circuit breakers, transfer switches, disconnect switches, junction boxes,
motors, transformers (other), panel boards (other), local control devices,
miscellaneous panels and instruments, solenoid valves, control drives, signal
converters and monitors, conductivity instrumentation, pH instrumentations,
recorders, subpanels and switches/lights, and recorders/pen description.
X-0-0
XXXXXXX X-0
to
Operating
Equipment Agreement
DESCRIPTION OF COMMON FACILITIES EQUIPMENT
All those certain assets used in connection with the operation
or maintenance of both the Clover Unit 1 Generating Facility and the Clover Unit
2 Generating Facility (excluding, the Xxxx 0 Xxxxxxxxx, xxx Xxxx 0 Equipment,
the Xxxx 0 Foundation, the Unit 2 Foundation and the Common Facilities
Foundation) and all replacements or substitutions thereto, including all those
certain parts and items of equipment identified on Schedule 2 (which is not
intended to limit the generality of the foregoing definition to the assets
identified therein) attached hereto, together with all auxiliary and support
items, including all valves, backflow preventers, breakdown orifices, exhaust
heads, expansion joints, flexible hoses, gage glasses, relief valves, sight flow
indicators, strainers, traps, local switch stations, transducers, circuit
breakers, transfer switches, disconnect switches, junction boxes, motors,
transformers (other), panel boards (other), local control devices, miscellaneous
panels and instruments, solenoid valves, control drives, signal converters and
monitors, conductivity instrumentation, pH instrumentations, recorders,
subpanels and switches/lights, and recorders/pen description.
A-2-1
EXHIBIT B
to
Operating
Equipment Agreement
POWER SALES AGREEMENT
CAPACITY AND ENERGY CHARGES
1. Except as otherwise indicated, the terms used in this Exhibit B
shall have the same meaning as in the Participation Agreement and the following
additional definitions shall apply:
"Actual Available Hours" shall be calculated by multiplying the total
number of hours in a Contract Year by the Equivalent Availability Factor.
"Availability" shall have the meaning set forth in the Operating Agency
Agreement.
"Availability Make-Up Charge" for any Contract Year shall be the amount
determined by dividing (i) the aggregate amount of the Capacity Payments for
such Contract Year by (i) the Target Available Hours for such Contract Year.
"Capacity Payment" for any Contract Year shall mean [115]% of the
Minimum Capacity Payments for such Contract Year, and for any semi-annual period
commencing on a Power Sales Payment Date (or, in the case of the first such
period, commencing on January 5, 2020) shall mean [115]% of the Minimum Capacity
Payment in respect of such period, in either case as such Minimum Capacity
Payment may be adjusted from time to time as described herein.
"Contract Year" shall have the meaning set forth in the Operating
Agency Agreement.
"Equivalent Availability Factor" for any Contract Year shall mean the
equivalent availability of the Facility Owner's Generating Facility Interest
expressed as a percentage and determined by the Owner Participant in accordance
with Prudent Utility Practices.
"Facility Owner's Consideration" shall mean an amount equal to the sum
of Head Equipment Agreement Consideration and Head Foundation Interest
Consideration.
B-1
"Generating Facility Interest" shall have the meaning set forth in the
Operating Agency Agreement.
"Indemnity Amounts" for any monthly period shall mean the amounts
payable by Facility Owner to a New Lender described in paragraph 9 of Schedule 3
to the Operating Equipment Agreement.
"Minimum Capacity Payment" for any semi-annual period immediately
following a Power Sales Payment Date shall mean the amount set forth on Annex A
to this Exhibit for such Power Sales Payment Date as such amount may be adjusted
in accordance with Section 15.3(c)(vii) of the Operating Equipment Agreement,
and for any Contract Year shall mean the sum of the Minimum Capacity Payments
for the semi-annual periods comprising such Contract Year. In order to preserve
the Net Economic Return of the Owner Participant, the Minimum Capacity Payments
shall also be adjusted from time to time during the Power Sales Agreement Term
to reflect all Capital Repairs or Construction Costs (as such terms are defined
in the Operating Agency Agreement) and taking into account any indebtedness
incurred to fund Capital Repairs or Construction Costs, including any financing
provided to or for the benefit of Facility Owner for such purpose, in accordance
with the assumptions and methodologies (including, without limitation, the Tax
Assumptions and pricing assumptions, as the same shall be adjusted from time to
time) originally used in calculating the amounts set forth on Annex A hereto.
"Monthly Energy Charge" shall mean the amount set forth in the annual
notice provided by the Owner Participant to the Power Purchaser as set forth in
Section 4 below.
"Power Purchaser's Entitlement" shall mean the percentage of the
installed capacity, available capacity or hourly generation of the Generating
Facility Interest which the Power Purchaser has agreed to purchase under the
Power Sales Agreement.
"Power Purchaser's Share" shall mean the percentage, equal to the Power
Purchaser's Entitlement percentage, of the Capacity Payment and Monthly Energy
Charge, in each case, as adjusted below, which the Power Purchaser has agreed to
pay pursuant to the Power Sales Agreement.
"Risk Amount" for any Contract Year shall mean an amount equal to the
difference between the aggregate amount of the relevant Capacity Payments and
the relevant Minimum Capacity Payment.
"Target Availability Factor" shall mean the Generating Facility
Interest's Availability (taking into account variations resulting from the
regular maintenance schedule), expressed as a percentage, for the three years
preceding the Expiration Date as determined by an independent engineer in
accordance with Section 5.2(h) of the Equipment Operating Agreement.
"Target Available Hours" shall be calculated by multiplying the total
number of hours in a Contract Year by the Target Availability Factor.
2. Power Purchaser's Share: The Power Sales Agreement shall obligate
the Power Purchaser to reimburse the Facility Owner for the Power Purchaser's
B-2
Share of all costs, expenditures and charges associated with the Generating
Facility Interest as set out in Sections 3 through 6 of this Exhibit. Unless the
Power Sales Agreement is terminated as described below or the Generating
Facility Interest is not capable of generating and delivering the Power
Purchaser's Entitlement for an uninterrupted period of 180 days, the Power
Purchaser shall pay the Power Purchaser's Share in all events. The charges for
which the Power Purchaser is liable under the Power Sales Agreement shall
include the Power Purchaser's Share of all of the Facility Owner's and the Owner
Participant's fixed and variable costs of rendering service under the Power
Sales Agreement, except as provided below.
In the event that the Facility Owner fails to perform its material
obligations under the Power Sales Agreement and does not correct such failure
during the notice period specified below, the Power Purchaser, may at its
option, and after 180 days advance written notice to the Facility Owner and the
Owner Participant, terminate the Power Sales Agreement; provided, however, any
temporary shut-down of the Facility by reason of any Uncontrollable Forces (as
such term is defined in the Operating Agency Agreement) or for repairs
(including repairs following major casualties or equipment failures),
maintenance or improvements shall not result in a failure of the Facility Owner
to perform its material obligations under the Power Sales Agreement so long as
the Facility Owner is (or its agents are) exercising reasonable diligence to
repair or restore the Facility to operation.
3. Capacity Payment: The Power Purchaser shall agree to pay to the
Facility Owner semi-annually on the Power Sales Payment Dates indicated on Annex
A hereto, until the termination of the Power Sales Agreement, the Power
Purchaser's Share of the Capacity Payment, in advance, and as the same may be
adjusted pursuant to Section 5 of this Exhibit.
4. Monthly Energy Charge: The Power Purchaser shall agree to pay the
Facility Owner monthly, commencing with the first day of the Power Sales
Agreement and continuing for the term of the Power Sales Agreement (and the
payment of all amounts due thereunder), the Power Purchaser's Share of the
Monthly Energy Charge, as adjusted in accordance with Section 6 below. The
Monthly Energy Charge for the Generating Facility Interest shall consist of:
(1) total monthly Operation and Maintenance Expenses (as
such term is defined in the Operating Agency Agreement);
plus
(2) total monthly Operating Fee (as such term is defined in
the Operating Agency Agreement); plus
(3) one-twelfth of the total annual property taxes, both
personal and real, and other Taxes described in Section
9.22 of the Operating Agency Agreement, imposed on the
Facility Owner; plus
(4) one-twelfth of the aggregate Taxes described in Section
8.2(b)(i) of the Participation Agreement ("Doing
Business Taxes") imposed on the Facility Owner and the
Owner Participant by any taxing authorities within or
B-3
without the United States in excess of the amount of
Doing Business Taxes that would have been payable if the
net taxable income of the Facility Owner from the
ownership and operation of the Generating Facility
Interest were subject only to United States federal
income tax at the maximum marginal rate generally
applicable to corporations and to state income taxes at
the combined effective rate of state and local income
tax the Owner Participant would have been subject to
without regard to the Overall Transaction; plus
(5) total monthly Indemnity Amounts; plus
(6) one-twelfth of all other annual costs (other than
Capital Repairs or Construction Costs, but including all
Taxes other than property taxes or Doing Business Taxes
described in clauses (3) and (4) above) associated with
the provision of service under the Power Sales
Agreement.
One month prior to the first day of the first Contract Year of the
Power Sales Agreement and each succeeding Contract Year, the Owner Participant
shall estimate the Monthly Energy Charge for the next Contract Year. During the
course of the Contract Year, adjustments to the estimate of the Monthly Energy
Charge shall be made by the Owner Participant to reflect changes deemed by the
Owner Participant to be significant, and the Owner Participant shall inform the
Power Purchaser in writing of any such adjustments. The Owner Participant shall
use the estimated Monthly Energy Charges, as adjusted, for bills rendered for
service provided during the Contract Year. Copies of the estimate shall be
provided to the Power Purchaser.
5. Adjustment to Capacity Payment for Equivalent Availability: In any
Contract Year in which the Actual Available Hours exceed the Target Available
Hours, the Capacity Payment for that Contract Year shall be increased by the
amount determined by multiplying the Availability Make-Up Charge for that
Contract Year by such excess, up to a maximum adjustment during such Contract
Year equal to the Risk Amount.
In any Contract Year in which the Target Available Hours exceed the
Actual Available Hours, the Capacity Payment for that Contract Year shall be
decreased by the amount determined by multiplying the Availability Make-Up
Charge for that Contract Year by such excess, up to a maximum adjustment during
that Contract Year equal to the Risk Amount.
6. True-Up of Capacity Payment and Monthly Energy Charge: Within 120
days after the end of a Contract Year, the Owner Participant shall develop
actual data for the Contract Year and recompute the Capacity Payments and the
Monthly Energy Charge for the Contract Year using the actual data. The Owner
Participant shall within that 120 day period render a statement truing-up the
Monthly Energy Charge bills previously rendered on estimated data and the
Capacity Payment for the Contract Year to reflect such actual data. The Owner
B-4
Participant shall refund the amount of any overcollections and the Power
Purchaser shall pay the amount of any undercollections. Interest at the Debt
Rate shall be paid on any refunds of overcollections and charged on any
additional payments for undercollections from the date that any xxxx involving
an overcollection or an undercollection was paid through the date that the
adjusted xxxx was rendered.
B-5
ANNEX A
to Exhibit B
to
Operating
Equipment Agreement
MINIMUM CAPACITY PAYMENTS
Contract Year Commencing Power Sales Payment Date Minimum Capacity Payment
Jan 5, 2020 Jan 5, 2020
July 5, 2020
Jan 5, 2021 Jan 5, 2021
July 5, 2021
Jan 5, 2022 Jan 5, 2022
July 5, 2022
Jan 5, 2023 Jan 5, 2023
July 5, 2023
Jan 5, 2024 Jan 5, 2024
July 5, 2024
Jan 5, 2025 Jan 5, 2025
July 5, 2025
Jan 5, 2026 Jan 5, 2026
July 5, 2026
Jan 5, 2027 Jan 5, 2027
July 5, 2027
Jan 5, 2028 Jan 5, 2028
July 5, 2028
Jan 5, 2029 Jan 5, 2029
July 5, 2029
B-6
Jan 5, 2030 Jan 5, 2030
July 5, 2030
Jan 5, 2031 Jan 5, 2031
July 5, 2031
Jan 5, 2032 Jan 5, 2032
July 5, 2032
Jan 5, 2033 Jan 5, 2033
July 5, 2033
Jan 5, 2034 Jan 5, 2034
July 5, 2034
Jan 5, 2035 Jan 5, 2035
July 5, 2035
Jan 5, 2036 Jan 5, 2036
July 5, 2036
B-7
ANNEX B
TO Exhibit B
to
Operating
Equipment Agreement
POWER SALES STIPULATED LOSS VALUES
B-8
SCHEDULE 1
to
Operating
Equipment Agreement
BASIC PAYMENTS
Payment Date Advance Payments Arrears Payments
S1-1
SCHEDULE 2
to
Operating
Equipment Agreement
TERMINATION VALUES
Termination Date Termination Value
S2-1
SCHEDULE 3
to
OPERATING
EQUIPMENT AGREEMENT
TERMS AND CONDITIONS OF NEW LOAN TO BE MADE UPON COMMENCE-
MENT OF SERVICE CONTRACT OPTION
26. BORROWER: The Facility Owner.
27. PURPOSE: To provide non-recourse debt which will be serviced by the
Capacity Purchase Price and energy payments afforded under one or more take if
tendered Power Sales Agreements as arranged as part of the Service Contract
Option as defined in the Operating Equipment Agreement.
28. LENDER: To be arranged by Old Dominion in accordance with Section
15.3 of the Operating Equipment Agreement.
29. AMOUNT: Such amount as shall be equal to the unpaid principal amount
of the Loans outstanding under the Loan Agreement on the Expiration Date.
30. MATURITY: 17 years.
31. INTEREST RATE: A fixed rate of interest for the term to be determined
based upon competitive bids obtained from not less than three prospective
Lenders.
32. AMORTIZATION: As set forth in Annex 1 to this Schedule 3.
33. SECURITY: A first priority deed of trust lien against all of the
Borrower's rights, title and interests in the Ground Interest and in the
Foundation Interest (to the extent the Foundation Interest is deemed to be real
estate for purposes of Article 2 of Chapter 14 of Title 55 of the Code of
Virginia 1950, as amended) and a first priority security interest in all
assets of the Borrower consisting of:
(a) the Borrower's interest in the Equipment Interest, the
Foundation Interest and the Clover Agreements Assignment;
(b) the Power Sales Agreement and all accounts receivable
arising thereunder, revenues therefrom, and other proceeds
thereof;
S3-1
(c) the interest of the Borrower in, to and under all other
contracts and agreements relating to the Equipment Interest
and the Foundation Interest, the ownership and operation
thereof, the transmission of the output thereof, and the Power
Sales Agreement;
(d) all insurance proceeds relating to the Equipment Interest, the
Foundation Interest and the Power Sales Agreement, consistent,
however, with the Clover Agreements; and
(e) the New Loan shall be non-recourse to the Facility Owner,
payable only from the Facility Owner's interest in the Trust
Estate.
34. INDEMNITIES: Customary in loans of this nature, including,
without limitation, increased costs, capital adequacy, withholding tax and
other tax liabilities and other indemnities. The Borrower will indemnify
the Lender against all losses, liabilities, claims, damages or expenses,
including, without limitation, legal or other expenses incurred in connection
with investigating, preparing to defend or defending any claim, however
asserted, incurred in conjunction with the contemplated transactions. Such
indemnities will be secured by the security interest referred to in paragraph 8.
35. REPRESENTATIONS AND WARRANTIES: Customary in loans of this nature,
including, without limitation, those pertaining to the following:
o Organization, authority, due execution and validity;
o Title to properties, licenses and environmental and regulatory
compliance;
o No Liens other than Permitted Liens;
o Use of proceeds to pay Loan Certificates outstanding on the
Expiration Date;
o True and complete disclosure, no material litigation; and
o Absence of default.
36. COVENANTS: Customary in loans of this nature without limitation,
including, without limitation:
Additional Indebtedness. The Borrower shall not incur
additional indebtedness without the consent of the Lender.
Negative Pledge. The Borrower shall not create or suffer to
exist any Lien on the collateral except for Permitted Liens
except with the consent of the Lender.
S3-2
Other Covenants. Including, but not limited to, the following
topics:
o Punctual payments, compliance with laws;
o Maintenance of properties and insurance, payment of
taxes;
o Maintenance of books and records;
o Compliance with environmental and regulatory laws and
regulations;
o Notices of default, material litigation;
o ERISA compliance;
o All loan and related documents to be kept in full force
and effect with no amendments;
o No change in fiscal year;
o Physical inspection of books and records by the Lender
or its designee, upon reasonable notice and subject to
reasonable limitations;
o Nature of business will remain substantially the same;
and
o All governmental licenses, approvals, permits, etc.
37. REPORTING REQUIREMENTS OF POWER PURCHASER:
Unaudited financial statements: Within 60 days of the close of
each quarter.
Compliance certificate: Within 90 days of the close of each quarter.
Annual audited financial statements: Within 90 days after the close of
each fiscal year.
38. EVENTS OF DEFAULT: Customary for loans of this nature, including, but
not limited to, the following:
o Payment defaults;
o Any representation or warranty made in connection with
the Loan being incorrect in any material respect when
made;
S3-3
o Failure to comply with covenants;
o Failure to perform in other material respects under the
Loan;
o Voluntary or involuntary receivership or bankruptcy
filing; and
o Insolvency of Borrower.
39. CONDITIONS PRECEDENT: Those customarily found in loans of this nature,
including, but not limited to, the following:
o Loan agreement and other related documentation to be in
form and substance satisfactory;
o Legal opinions;
o Receipt of evidence of insurance coverage satisfactory
to the Lender;
o No material adverse change in financial and operating
condition of Power Purchaser;
o No default or event of default;
o Payment of all fees and expenses, including all legal
costs and expenses of the Lender;
o Compliance with environmental and regulatory laws and
regulations;
o Representations and warranties true and correct;
o Other documents reasonably requested.
40. GOVERNING LAW: The loan agreement will be subject to the laws of the
State of New York.
41. ASSIGNMENT/PARTICIPATION SALES: Assignments of interests in the Loan may
be made by the Lender with the consent of the Borrower, subject to a
minimum assignment amount of $10,000,000. Customary participation rights (with
customary voting limitations) will be available to assignees and participants).
S3-4
SCHEDULE 1
to Operating
Equipment Agreement
BASIC PAYMENTS
Payment Date Advance Payment Arrears Payments
-----------------------------------------------------------------------------
05-Jan-97 0.00 7,817,130.68
05-Jul-97 0.00 2,299,440.00
05-Jan-98 0.00 14,153,678.55
05-Jul-98 0.00 2,299,440.00
05-Jan-99 0.00 14,038,321.27
05-Jul-99 0.00 2,299,440.00
05-Jan-00 0.00 14,040,943.04
05-Jul-00 0.00 2,299,440.00
05-Jan-01 0.00 14,040,883.44
05-Jul-01 0.00 2,299,440.00
05-Jan-02 0.00 14,040,884.80
05-Jul-02 0.00 2,299,440.00
05-Jan-03 0.00 14,040,884.77
05-Jul-03 0.00 2,299,440.00
05-Jan-04 0.00 14,040,884.77
05-Jul-04 0.00 2,299,440.00
05-Jan-05 13,779,963.77 14,040,884.77
05-Jul-05 0.00 0.00
05-Jan-06 14,040,884.77 2,299,440.00
05-Jul-06 2,299,440.00 0.00
05-Jan-07 14,040,884.77 0.00
05-Jul-07 2,299,440.00 0.00
05-Jan-08 15,856,476.41 0.00
05-Jul-08 2,299,440.00 0.00
05-Jan-09 17,672,068.05 0.00
05-Jul-09 2,299,440.00 0.00
05-Jan-10 17,672,068.05 0.00
05-Jul-10 2,299,440.00 0.00
05-Jan-11 17,672,068.05 0.00
05-Jul-11 2,299,440.00 0.00
05-Jan-12 17,672,068.05 0.00
05-Jul-12 2,299,440.00 0.00
05-Jan-13 17,672,068.05 0.00
05-Jul-13 2,299,440.00 0.00
05-Jan-14 17,672,068.05 0.00
05-Jul-14 2,299,440.00 0.00
05-Jan-15 17,672,068.05 0.00
05-Jul-15 2,299,440.00 0.00
05-Jan-16 17,672,068.05 0.00
05-Jul-16 2,299,440.00 0.00
05-Jan-17 17,672,068.05 0.00
SCHEDULE 1
to
Operating
Equipment Agreement
BASIC PAYMENTS
Payment Date Advance Payment Arrears Payments
-------------------------------------------------------------------------------
05-Jul-17 2,299,440.00 0.00
05-Jan-18 17,672,068.05 0.00
05-Jul-18 2,299,440.00 0.00
05-Jan-19 11,044,183.59 0.00
05-Jul-19 9,077,958.21 0.00
04-Jan-20 0.00 0.00
SCHEDULE 2
TO
OPERATING
EQUIPMENT
AGREEMENT
TERMINATION VALUES
DATE AMOUNT
------- --------------
7/31/96 312,475,638.75
8/5/96 316,077,643.61
9/5/96 321,057,837.72
10/5/96 324,429,224.09
11/5/96 327,849,910.27
12/5/96 331,321,227.36
1/5/97 325,325,866.37
2/5/97 327,156,206.38
3/5/97 328,994,207.98
4/5/97 330,840,078.02
5/5/97 332,672,553.87
6/5/97 334,512,748.99
7/5/97 334,039,956.70
8/5/97 335,920,350.81
9/5/97 337,808,510.98
10/5/97 339,683,171.83
11/5/97 341,565,443.93
12/5/97 343,455,532.80
1/5/98 331,178,495.87
2/5/98 333,032,384.71
3/5/98 334,894,145.26
4/5/98 336,763,990.03
5/5/98 338,619,904.14
6/5/98 340,483,744.64
7/5/98 340,034,052.36
8/5/98 341,938,370.44
9/5/98 343,850,657.91
10/5/98 345,748,896.80
11/5/98 347,654,940.95
12/5/98 349,569,001.10
1/5/99 337,430,739.27
2/5/99 339,309,649.70
3/5/99 341,196,626.61
4/5/99 343,091,887.78
5/5/99 344,972,586.60
6/5/99 346,861,400.19
7/5/99 346,436,037.32
8/5/99 348,365,567.84
9/5/99 350,303,248.61
10/5/99 352,226,229.38
11/5/99 354,157,183.55
12/5/99 356,096,326.42
1/5/00 343,979,865.73
2/5/00 345,884,076.24
3/5/00 347,796,517.10
4/5/00 349,717,410.50
5/5/00 351,623,009.78
6/5/00 353,536,876.90
7/5/00 353,135,820.18
8/5/00 355,090,557.36
9/5/00 357,053,585.50
10/5/00 359,001,153.58
11/5/00 360,956,819.06
12/5/00 362,920,800.57
1/5/01 350,828,464.31
2/5/01 352,757,643.77
3/5/01 354,695,166.40
4/5/01 356,641,257.48
5/5/01 358,571,195.65
6/5/01 360,509,497.48
7/5/01 360,131,996.09
8/5/01 362,111,188.61
9/5/01 364,098,748.80
10/5/01 366,069,949.86
11/5/01 368,049,302.82
12/5/01 370,037,027.78
1/5/02 357,967,513.27
2/5/02 359,920,406.55
3/5/02 361,881,676.51
4/5/02 363,851,549.34
5/5/02 365,804,247.58
6/5/02 367,765,317.25
7/5/02 367,409,534.68
8/5/02 369,411,317.81
9/5/02 371,421,447.70
10/5/02 373,414,140.00
11/5/02 375,414,933.61
12/5/02 377,424,047.27
1/5/03 365,374,811.11
2/5/03 367,348,826.98
3/5/03 369,331,133.93
4/5/03 371,321,955.85
5/5/03 373,294,370.33
6/5/03 375,275,032.66
7/5/03 374,937,573.26
8/5/03 376,958,482.81
9/5/03 378,987,573.60
10/5/03 380,997,914.20
11/5/03 383,016,150.68
12/5/03 385,042,496.23
1/5/04 373,009,132.71
2/5/04 374,999,770.51
3/5/04 376,998,439.19
4/5/04 379,005,355.60
5/5/04 380,992,354.98
6/5/04 382,987,287.01
7/5/04 382,662,538.45
8/5/04 384,696,835.53
9/5/04 386,738,938.16
10/5/04 388,760,669.66
11/5/04 390,789,867.42
12/5/04 392,826,733.04
1/5/05 380,802,201.35
2/5/05 368,931,115.00
3/5/05 370,847,511.14
4/5/05 372,771,629.00
5/5/05 374,677,854.72
6/5/05 376,591,527.57
7/5/05 378,487,026.26
8/5/05 380,454,409.57
9/5/05 382,429,143.63
10/5/05 384,385,604.56
11/5/05 386,349,121.32
12/5/05 388,319,884.44
1/5/06 387,972,827.20
2/5/06 375,850,449.23
3/5/06 377,776,089.31
4/5/06 379,709,055.25
5/5/06 381,623,175.48
6/5/06 383,544,310.52
7/5/06 385,446,280.43
8/5/06 385,105,958.65
9/5/06 387,071,944.18
10/5/06 389,018,613.08
11/5/06 390,971,813.15
12/5/06 392,931,720.73
1/5/07 394,872,147.57
2/5/07 382,752,827.93
3/5/07 384,680,927.49
4/5/07 386,615,737.92
5/5/07 388,529,694.95
6/5/07 390,449,981.01
7/5/07 392,349,021.51
8/5/07 392,006,011.75
9/5/07 393,968,528.27
10/5/07 395,909,549.95
11/5/07 397,856,241.87
12/5/07 399,808,757.14
1/5/08 401,739,507.54
2/5/08 387,782,978.62
3/5/08 389,688,464.65
4/5/08 391,599,638.75
5/5/08 393,495,168.77
6/5/08 395,396,118.05
7/5/08 397,281,147.19
8/5/08 396,923,941.65
9/5/08 398,871,450.51
10/5/08 400,802,890.45
11/5/08 402,739,313.34
12/5/08 404,680,853.73
1/5/09 406,606,164.04
2/5/09 390,816,644.95
3/5/09 392,704,141.43
4/5/09 394,596,719.02
5/5/09 396,479,795.78
6/5/09 398,367,834.31
7/5/09 400,246,249.46
8/5/09 399,882,308.39
9/5/09 401,822,773.79
10/5/09 403,753,620.65
11/5/09 405,689,308.38
12/5/09 407,629,967.68
1/5/10 409,561,013.67
2/5/10 393,777,444.42
3/5/10 395,670,920.31
4/5/10 397,569,507.69
5/5/10 399,458,397.10
6/5/10 401,352,274.16
7/5/10 403,236,326.07
8/5/10 402,878,235.62
9/5/10 404,824,573.33
10/5/10 406,761,086.44
11/5/10 408,702,457.14
12/5/10 410,648,816.59
1/5/11 412,585,352.02
2/5/11 396,807,484.52
3/5/11 398,706,674.44
4/5/11 400,610,988.42
5/5/11 402,505,370.57
6/5/11 404,404,746.97
7/5/11 406,294,058.22
8/5/11 405,941,435.75
9/5/11 407,893,241.77
10/5/11 409,834,976.72
11/5/11 411,781,562.92
12/5/11 413,733,131.39
1/5/12 415,674,622.35
2/5/12 399,901,913.48
3/5/12 401,806,248.16
4/5/12 403,715,692.65
5/5/12 405,614,923.87
6/5/12 407,519,127.12
7/5/12 409,412,975.57
8/5/12 409,065,084.84
9/5/12 411,021,591.13
10/5/12 412,967,727.22
11/5/12 414,918,674.15
12/5/12 416,874,561.85
1/5/13 418,820,062.64
2/5/13 403,051,546.75
3/5/13 404,960,022.05
4/5/13 406,873,553.42
5/5/13 408,776,527.88
6/5/13 410,684,409.89
7/5/13 412,581,582.46
8/5/13 412,237,183.48
9/5/13 414,197,103.66
10/5/13 416,146,285.27
11/5/13 418,100,187.84
12/5/13 420,058,938.84
1/5/14 422,006,919.68
2/5/14 406,241,031.79
3/5/14 408,152,027.08
4/5/14 410,067,967.50
5/5/14 411,972,925.35
6/5/14 413,882,665.32
7/5/14 415,781,255.30
8/5/14 415,438,396.18
9/5/14 417,399,711.72
10/5/14 419,349,828.52
11/5/14 421,304,505.48
12/5/14 423,263,865.71
1/5/15 425,211,974.39
2/5/15 409,446,305.31
3/5/15 411,357,331.86
4/5/15 413,273,110.95
5/5/15 415,177,372.63
6/5/15 417,086,204.18
7/5/15 418,983,330.75
8/5/15 418,639,059.70
9/5/15 420,598,724.06
10/5/15 422,546,606.96
11/5/15 424,498,788.55
12/5/15 426,455,384.89
1/5/16 428,400,116.95
2/5/16 412,631,074.67
3/5/16 414,538,427.82
4/5/16 416,450,225.20
5/5/16 418,349,824.25
6/5/16 420,253,658.17
7/5/16 422,145,078.74
8/5/16 421,795,045.99
9/5/16 423,748,575.67
10/5/16 425,689,576.53
11/5/16 427,634,472.84
12/5/16 429,583,369.79
1/5/17 431,519,612.83
2/5/17 415,741,954.60
3/5/17 417,640,233.13
4/5/17 419,542,484.80
5/5/17 421,431,660.58
6/5/17 423,324,563.72
7/5/17 425,204,138.54
8/5/17 424,842,046.54
9/5/17 426,782,956.33
10/5/17 428,710,367.75
11/5/17 430,641,072.67
12/5/17 432,575,160.02
1/5/18 434,495,564.78
2/5/18 418,701,751.19
3/5/18 420,583,193.81
4/5/18 422,467,910.64
5/5/18 424,338,408.08
6/5/18 426,211,884.22
7/5/18 428,070,837.47
8/5/18 427,687,682.05
9/5/18 429,606,705.63
10/5/18 431,510,960.18
11/5/18 433,417,628.92
12/5/18 435,326,777.07
1/5/19 437,220,889.53
2/5/19 428,071,932.21
3/5/19 429,969,356.64
4/5/19 431,869,038.59
5/5/19 433,752,547.31
6/5/19 435,637,937.83
7/5/19 437,506,769.25
8/5/19 430,311,070.52
9/5/19 432,194,855.60
10/5/19 434,061,715.80
11/5/19 435,929,685.82
12/5/19 437,798,795.64
1/4/20 439,650,584.40
