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EXHIBIT 4(b)-3
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LOAN AGREEMENT
BETWEEN
CITY OF FORSYTH, MONTANA
AND
AVISTA CORPORATION
$17,000,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999B
DATED AS OF SEPTEMBER 1, 1999
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The amounts payable to the Issuer and certain other rights of the Issuer
under this Loan Agreement (except for amounts payable to, and certain rights of,
the Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06,
Section 5.07, Section 5.08 and Section 7.05 hereof and any rights of the Issuer
to receive notices, certificates, requests, requisitions, directions and other
communications hereunder) have been pledged and assigned to Chase Manhattan Bank
and Trust Company, National Association, as Trustee under the Trust Indenture,
dated as of September 1, 1999, from the Issuer. For the purpose of perfecting
the security interest of such Trustee in such amounts payable and such rights
assigned to such Trustee under the Montana Uniform Commercial Code --Secured
Transactions, the counterpart of this Loan Agreement actually delivered to the
Trustee shall be deemed the original thereof.
Forsyth Series 1999B Loan Agreement
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LOAN AGREEMENT
BETWEEN
CITY OF FORSYTH, MONTANA
AND
AVISTA CORPORATION
$17,000,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999B
DATED AS OF SEPTEMBER 1, 1999
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The amounts payable to the Issuer and certain other rights of the Issuer
under this Loan Agreement (except for amounts payable to, and certain rights of,
the Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06,
Section 5.07, Section 5.08 and Section 7.05 hereof and any rights of the Issuer
to receive notices, certificates, requests, requisitions, directions and other
communications hereunder) have been pledged and assigned to Chase Manhattan Bank
and Trust Company, National Association, as Trustee under the Trust Indenture,
dated as of September 1, 1999, from the Issuer. For the purpose of perfecting
the security interest of such Trustee in such amounts payable and such rights
assigned to such Trustee under the Montana Uniform Commercial Code --Secured
Transactions, the counterpart of this Loan Agreement actually delivered to the
Trustee shall be deemed the original thereof.
This counterpart of the Loan Agreement has been actually delivered to
the Trustee and the Trustee acknowledges receipt thereof.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION, as Trustee
By
Authorized Officer
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TABLE OF CONTENTS
SECTION PAGE
Recitals.....................................................................................................................1
ARTICLE I DEFINITIONS....................................................................................2
ARTICLE II REPRESENTATIONS, WARRANTIES AND AGREEMENTS.....................................................2
Section 2.01. Representations, Warranties and Agreements of Issuer...........................................2
Section 2.02. Representations, Warranties and Agreements of Company..........................................4
ARTICLE III ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF PROCEEDS OF THE BONDS; THE PROJECT.............7
Section 3.01. Issuance of Bonds..............................................................................7
Section 3.02. Issuance of Other Obligations..................................................................7
Section 3.03. The Loan; Disposition of Bond Proceeds and Certain Other Moneys................................7
Section 3.04. Changes to Project.............................................................................7
ARTICLE IV LOAN PAYMENTS; PAYMENTS TO REMARKETING AGENT AND TRUSTEE; OTHER OBLIGATIONS....................8
Section 4.01. Loan Payments..................................................................................8
Section 4.02. Payments of Purchase Price.....................................................................8
Section 4.03. Payments Assigned; Obligation Absolute.........................................................8
Section 4.04. Payment of Expenses............................................................................9
Section 4.05. Indemnification................................................................................9
Section 4.06. Payment of Taxes and Charges in Lieu Thereof..................................................10
Section 4.07. Credit Facility...............................................................................10
Section 4.08. Compliance With Prior Agreement...............................................................11
ARTICLE V SPECIAL COVENANTS.............................................................................12
Section 5.01. Maintenance of Existence; Conditions Under Which Exceptions Permitted.........................12
Section 5.02. Permits or Licenses...........................................................................12
Section 5.03. Arbitrage Covenant............................................................................13
Section 5.04. Financing Statements..........................................................................13
Section 5.05. Covenants With Respect to Tax-Exempt Status of the Bonds......................................13
Section 5.06. Indemnification of Issuer.....................................................................13
Section 5.07. Records of Company; Maintenance and Operation of the Project..................................14
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SECTION PAGE
Section 5.08. Right of Access to the Project................................................................14
Section 5.09. Remarketing Agent.............................................................................15
Section 5.10. Credit Ratings................................................................................15
Section 5.11. Purchases of PARS Rate Bonds..................................................................15
Section 5.12. Credit Facility...............................................................................15
ARTICLE VI ASSIGNMENT....................................................................................15
Section 6.01. Conditions....................................................................................15
Section 6.02. Documents Furnished to Trustee................................................................16
Section 6.03. Limitation....................................................................................16
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES................................................................16
Section 7.01. Events of Default.............................................................................16
Section 7.02. Force Majeure.................................................................................17
Section 7.03. Remedies......................................................................................18
Section 7.04. No Remedy Exclusive...........................................................................18
Section 7.05. Reimbursement of Attorneys'Fees...............................................................18
Section 7.06. Waiver of Breach..............................................................................18
ARTICLE VIII PURCHASE OR REDEMPTION OF BONDS...............................................................19
Section 8.01. Redemption of Bonds...........................................................................19
Section 8.02. Purchase of Bonds.............................................................................19
Section 8.03. Obligation to Prepay..........................................................................19
Section 8.04. Compliance With Indenture.....................................................................20
ARTICLE IX MISCELLANEOUS.................................................................................20
Section 9.01. Term of Agreement.............................................................................20
Section 9.02. Notices21
Section 9.03. Parties in Interest...........................................................................21
Section 9.04. Amendments....................................................................................21
Section 9.05. Counterparts..................................................................................21
Section 9.06. Severability..................................................................................21
Section 9.07. Governing Law.................................................................................21
Signatures..................................................................................................................22
EXHIBIT A -- Project Description
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LOAN AGREEMENT
This LOAN AGREEMENT, dated as of September 1, 1999, is between the CITY
OF FORSYTH, MONTANA, a political subdivision duly organized and existing under
the Constitution and laws of the State (the "Issuer"), and AVISTA CORPORATION, a
corporation duly organized under the laws of the State of Washington and duly
qualified to conduct business in the State (the "Company").
RECITALS:
A. The Issuer is authorized by the provisions of the Act to issue one or
more series of its revenue bonds to finance all or part of the cost of projects
consisting of exempt facilities (as such term is used in the Code) located
within the territorial limits of the Issuer.
B. The Act provides that payment of the principal of and interest on
revenue bonds issued thereunder shall be secured by a pledge of the revenues out
of which such revenue bonds shall be payable and may be secured by a pledge of
an agreement relating to a project.
C. The Issuer has previously issued the Prior Bonds on behalf of the
Company for the purpose of refinancing a portion of the costs of acquiring and
improving the Project.
D. The Issuer is authorized by the Act to issue its revenue refunding
bonds to refund the Prior Bonds.
E. By proper action of its governing body taken pursuant to and in
accordance with the provisions of the Act, the Issuer has authorized and
undertaken to issue its Pollution Control Revenue Refunding Bonds (Avista
Corporation Colstrip Project) Series 1999B and the issuance of the Bonds to
refund the Prior Bonds is authorized by the provisions of the Act.
F. The issuance of the Bonds to refund the Prior Bonds will provide
financing on more advantageous terms for the cost of the Project financed by the
Prior Bonds.
G. The Bonds shall be issued under and pursuant to the Trust Indenture,
dated as of September 1, 1999, between the Issuer and Chase Manhattan Bank and
Trust Company, National Association, as Trustee, pursuant to which the Issuer
shall pledge and assign to the Trustee certain rights of the Issuer hereunder.
H. Pursuant to this Agreement, the Issuer will loan the proceeds of the
Bonds to the Company to provide financing for the Project, and the Company
agrees to make, or cause to be made, payments sufficient to pay when due
(whether at stated maturity, by acceleration or otherwise) the principal of and
premium, if any, and interest on the Bonds.
I. The Company agrees under this Agreement to pay, or cause to be paid,
when due, the purchase price of Bonds purchased pursuant to the terms of the
Indenture.
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J. The issuance, sale and delivery of the Bonds and the execution and
delivery of this Agreement and the Indenture have been in all respects duly and
validly authorized in accordance with the Act and the Bond Resolution.
K. The Company and Ambac Assurance Corporation, a Wisconsin stock
insurance company, as Provider of the Credit Facility, have agreed to enter into
that certain Insurance Agreement, dated as of September 1, 1999, pursuant to
which the Provider is to issue its Municipal Bond Insurance Policy to guarantee
payment of the principal of the Bonds upon the stated maturity thereof, the
redemption price of the Bonds upon certain mandatory redemption and interest on
the Bonds as the same accrues and becomes due and payable.
In consideration of the respective representations and agreements
contained in this Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All words and terms used but not otherwise defined in this Agreement,
shall for all purposes of this Agreement have the meanings specified in Article
I of the Indenture, unless the context clearly requires otherwise. In addition,
the following words and terms shall have the following meanings when used in
this Agreement:
"Affiliate" means any entity controlling, controlled by or under common
control with the Company.
"Indenture" means the Trust Indenture, dated as of September 1, 1999,
between the Issuer and the Trustee, relating to the issuance of the Bonds as
such Trust Indenture may be supplemented and amended from time to time as
therein permitted.
The words "hereto," "hereunder" and other words of similar import refer
to this Agreement as a whole.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
SECTION 2.01. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ISSUER. The
Issuer represents, warrants and agrees that:
(a) The Issuer is a political subdivision of the State, duly
organized and validly existing under the Constitution and laws of the
State.
(b) Under the Act, the Issuer has the power to enter into the
transactions contemplated by this Agreement and the Indenture and to
carry out its obligations
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hereunder and thereunder, including the issuance and sale of the Bonds.
By proper action of its governing body, the Issuer has been duly
authorized to execute, deliver and duly perform this Agreement and the
Indenture and to issue and sell the Bonds and has made all
determinations and findings as and where required by Section 90-5-106 of
the Act.
(c) The aggregate principal amount of the Bonds authorized to be
issued under the Indenture for the purpose of refunding the Prior Bonds
does not exceed the aggregate principal amount of the Prior Bonds now
outstanding.
(d) The Prior Agreement and the Prior Indenture are each in full
force and effect and have not been amended or supplemented.
(e) The proceeds of the sale of the Bonds (i) will be deposited
with the Prior Trustee for deposit into the Prior Bond Fund to provide a
portion of the moneys necessary for the Refunding and (ii) will be
applied by the Prior Trustee to redeem the Prior Bonds pursuant to the
Prior Indenture on the Redemption Date. The Prior Bonds are now
outstanding in the principal amount of $17,000,000. Prior to the
issuance and delivery of the Bonds, the Prior Trustee will be given
irrevocable instructions and will be directed to call all of the Prior
Bonds for redemption on the Redemption Date.
(f) The Bonds are to be issued under and secured by the
Indenture, pursuant to which certain of the Issuer's right, title and
interest in this Agreement and the revenues derived by the Issuer
pursuant to this Agreement will be pledged and assigned to the Trustee
as security for payment of the principal and purchase price of, premium,
if any, and interest on the Bonds.
(g) Neither the execution and delivery of this Agreement or the
Indenture, the issuance and sale of the Bonds, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, the Tax
Certificate, the Indenture or the Bonds conflicts with or results in a
breach of the terms, conditions or provisions of any restriction or any
agreement or instrument to which the Issuer is now a party or by which
it is bound, or constitutes a default under any of the foregoing.
(h) The Issuer has not assigned or pledged and will not assign
or pledge its interest in this Agreement other than to secure the Bonds.
(i) To the knowledge of the Issuer, after due inquiry, no
litigation is pending or threatened against the Issuer to restrain or
enjoin the issuance or sale of the Bonds or in any way affecting any
authority for or the validity of the Bonds, the Indenture, this
Agreement or the existence or powers of the Issuer or the right of the
Issuer under the Act to refinance a portion of the costs of the Project
through the issuance of the Bonds.
(j) To the knowledge of the Issuer, after due inquiry, no event
has occurred and no condition exists which, upon the issuance of the
Bonds, would constitute an event of default on the part of the Issuer
under the Prior Indenture.
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(k) The Issuer will not knowingly take or omit to take any
action reasonably within its control the taking or omission of which
would adversely affect the Tax-Exempt status of the Bonds. The Issuer
will file or cause to be filed with the United States Department of
Treasury the information required by Section 149(e) of the Code.
(l) A public hearing relating to the Refunding for the Project
was held on May 4, 1999, following public notice thereof, pursuant to
Section 147(f) of the Code, and the public hearing and approval
requirements of Section 147(f) of the Code have been satisfied.
(m) Within the meaning of Sections 2-2-121 and 2-2-125, Montana
Code Annotated, as amended, no "public officer," "public employee,"
"officer" or "employee" of the Issuer is engaged as counsel, consultant,
representative, or agents of the Company, or has a substantial financial
interest in the Company. None of the officers, deputies, or employees of
the Issuer or employees having terminated their employment with the
Issuer within the six months immediately preceding this Agreement are
"interested in" this Agreement, the Indenture, the Bonds or the
transactions contemplated thereby, within the meaning of Section
2-2-201, Montana Code Annotated, as amended.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Issuer shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
SECTION 2.02. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF COMPANY. The
Company represents, warrants and agrees that:
(a) It is a corporation duly organized and validly existing
under the laws of the State of Washington and duly qualified as a
foreign corporation in good standing in the State, is not in violation
of any provision of its Articles of Incorporation or its Bylaws, in each
case as the same have been amended, has full corporate power to own its
properties and conduct its business, and has the corporate power to
enter into, and by proper corporate action has duly authorized the
execution and delivery of, this Agreement and the Tax Certificate.
(b) Neither the execution and delivery of this Agreement or the
Tax Certificate, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement or the Tax Certificate conflicts with or
will result in a breach of any of the terms, conditions or provisions of
any law or judgment to which the Company or its property or assets are
subject or of any corporate restriction contained in its Articles of
Incorporation or its Bylaws, in each case as the same have been amended,
or any agreement or instrument to which the Company is now a party or by
which it is bound, or constitutes, with or without the giving of notice
or lapse of time or both, a default under any of the foregoing, or
results in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Company under the
terms of any instrument or agreement.
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(c) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, usury or other similar laws affecting the
rights of creditors generally, equitable principles relating to the
availability of remedies and principles of public or governmental policy
limiting the enforceability of the indemnification and contribution
provisions.
(d) Other than the orders of the Washington Utilities and
Transportation Commission, the California Public Utilities Commission,
the Idaho Public Utilities Commission and the Oregon Public Utility
Commission and the approval by the Issuer, all of which orders and
approvals will have been received and be in effect prior to the initial
authentication and delivery of the Bonds, no consent, approval,
authorization or order of, or registration with, any court or
governmental or regulatory agency or body is required with respect to
the Company for the execution, delivery and performance by the Company
of this Agreement and the Tax Certificate.
(e) The Company has received an executed counterpart of the
Indenture and hereby consents to and approves of the provisions thereof.
(f) The information relating to the Project furnished by the
Company in writing to Xxxxxxx and Xxxxxx, as Bond Counsel, in connection
with the issuance by the Issuer of the Bonds, is, to the best of the
Company's knowledge, true and correct.
(g) The Prior Agreement and the Prior Indenture are in full
force and effect and have not been amended or supplemented.
(h) To the best knowledge of the Company, no event has occurred
and is continuing under the provisions of the Prior Indenture that now
constitutes, or with the lapse of time or the giving of notice, or both,
would constitute, an event of default under the Prior Indenture.
(i) Upon the initial authentication and delivery of the Bonds,
the Company has given or will give timely notice as required by the
provisions of the Prior Agreement of the Company's intent to prepay the
amounts payable thereunder to provide for the redemption of the Prior
Bonds on the Redemption Date.
(j) The aggregate principal amount of Bonds authorized to be
issued under the Indenture does not exceed the aggregate principal
amount of the Prior Bonds now Outstanding.
(k) The Company does not, as of the date of issuance of the
Bonds, reasonably expect any use of moneys derived from the proceeds of
the Bonds or any investment or reinvestment thereof or from the sale of
the Project which would cause the Bonds to be classified as "arbitrage
bonds" within the meaning of Section 148 of the Code.
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(l) All of the proceeds of the Prior Bonds, including the
investment earnings thereon, have been disbursed in accordance with the
provisions of the Prior Indenture and the Prior Agreement and there are
no proceeds of the Prior Bonds, or investment earnings therefrom, or any
other moneys being held by the Prior Trustee under the Prior Indenture.
(m) The Pollution Control Facilities that comprise the Project
constitute Exempt Facilities and consist of those facilities described
in Exhibit A hereto (as such Exhibit A is from time to time amended or
supplemented in accordance with Section 3.04 hereof), and the Company
shall not consent to any changes in the Project which would adversely
affect the qualification of the Project as a "project" under the Act or
adversely affect the Tax-Exempt status of the Bonds.
(n) Substantially all of the proceeds of the Prior Bonds have
been expended for the purpose of acquiring, constructing and improving
the Project, which constitutes Exempt Facilities. None of the proceeds
of the Prior Bonds were used (i) to acquire land (or an interest
therein) or (ii) to acquire any property (or an interest therein) unless
the first use of such property was pursuant to such acquisition, all
within the meaning of Section 147 of the Code.
(o) The Montana Department of Health and Environmental Sciences
has certified that the pollution control facilities constituting part of
the Project, as designed, are in furtherance of the purpose of abating
or controlling atmospheric pollutants or contaminants, and water
pollution, as the case may be.
(p) No construction, reconstruction or acquisition (within the
meaning of the Code) of the Project was commenced prior to the taking of
official action by the Issuer with respect thereto and the Project has
been placed in service.
(q) The average maturity of the Bonds does not exceed 120% of
the average reasonably expected economic life of the Project.
(r) All of the Prior Bonds will be redeemed within 90 days of
the date of the initial authentication and delivery of the Bonds, and
all of the proceeds of the sale of the Bonds will be spent within 90
days of the initial authentication and delivery of the Bonds.
(s) The Project (i) was designed to meet applicable federal,
state and local requirements for the control of pollution or the
disposal of solid waste, (ii) was and is to be used solely for purposes
contemplated by the Act, and (iii) is located within the boundaries of
Rosebud County, Montana.
(t) The representations, warranties and covenants of the Company
set forth in the Project Certificate are incorporated herein by
reference and are hereby made a part of this Agreement as if set forth
herein.
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(u) The Company will cooperate with the Issuer in filing or
causing to be filed with the United States Department of Treasury the
information required by Section 149(e) of the Code.
(v) The Company will pay the principal of and premium, if any,
and interest to the Redemption Date on all Prior Bonds that are validly
presented to the Company for payment after the Prior Trustee has paid to
the Company, in accordance with Section 4.08 of the Prior Indenture, any
moneys held in trust for the payment of the principal of and premium, if
any, and interest on the Prior Bonds.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Company shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
ARTICLE III
ISSUANCE OF THE BONDS; THE LOAN;
DISPOSITION OF PROCEEDS OF THE BONDS; THE PROJECT
SECTION 3.01. ISSUANCE OF BONDS. In order to refinance a portion of the
cost of the Project by effecting the Refunding, the Issuer shall issue the Bonds
under and in accordance with the Act and pursuant to the Indenture. The Company
hereby approves the issuance of the Bonds and all terms and conditions thereof.
SECTION 3.02. ISSUANCE OF OTHER OBLIGATIONS. The Issuer and the Company
expressly reserve the right to enter into, to the extent permitted by law, an
agreement or agreements other than this Agreement with respect to the issuance
by the Issuer, under an indenture or indentures other than the Indenture, of
obligations to provide additional funds to pay costs of facilities in addition
to the Project or to provide for the refunding of all or any principal amount of
the Bonds. Such obligations will not be entitled to the benefits of the
Indenture or the Credit Facility.
SECTION 3.03. THE LOAN; DISPOSITION OF BOND PROCEEDS AND CERTAIN OTHER
MONEYS. The Issuer shall lend to the Company the proceeds of the issuance and
sale of the Bonds for the purposes specified in Section 3.01 of this Agreement.
The Issuer and the Company shall, simultaneously with the delivery of the Bonds,
cause such proceeds, other than accrued interest, if any, to be transferred to
the Prior Trustee for deposit into the Prior Bond Fund to be used to pay the
principal amount of the Prior Bonds upon their redemption on the Redemption
Date.
SECTION 3.04. CHANGES TO PROJECT. The Company may at its own expense
cause the Project to be remodeled or cause such substitutions, modifications and
improvements to be made to the Project from time to time as the Company, in its
discretion, may deem to be desirable for its uses and purposes, which
remodeling, substitutions, modifications and improvements shall be included
under the terms of this Agreement as part of the Project; provided, however,
that no such remodeling, substitutions, modifications or improvements shall
change the description of the Project set forth in Exhibit A to this Agreement
or change the function of any principal
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component of the Project described in Exhibit A to this Agreement unless, in
either case, the Trustee and the Issuer first receive a Favorable Opinion of
Bond Counsel with respect to such change. If any such supplement or amendment
affects the description of the Project, the Company and the Issuer will amend
Exhibit A to this Agreement to reflect such supplement or amendment, which
supplement or amendment will not be considered as an amendment to this Agreement
requiring the consent of any Owner, the Trustee or the Provider for the purposes
of Article XII of the Indenture.
ARTICLE IV
LOAN PAYMENTS; PAYMENTS TO REMARKETING AGENT AND TRUSTEE;
OTHER OBLIGATIONS
SECTION 4.01. LOAN PAYMENTS. (a) As and for repayment of the loan made
to the Company by the Issuer pursuant to Section 3.03 hereof, the Company shall
pay to the Trustee, for the account of the Issuer, an amount equal to the
aggregate principal amount of and the premium, if any, on the Bonds from time to
time Outstanding and, as interest on its obligation to pay such amount, an
amount equal to interest on the Bonds, such amounts to be paid in installments
due on the dates, in the amounts and in the manner provided in the Indenture for
the payment of the principal of and premium, if any, and interest on the Bonds,
whether at maturity, upon redemption, acceleration or otherwise; provided,
however, that the obligation of the Company to make any such payment hereunder
shall be reduced by the amount of any moneys held by the Trustee under the
Indenture and available for such payment.
(b) In the event the Company shall fail to make any payment required by
Section 4.01(a) hereof with respect to the principal of and premium, if any, and
interest on any Bond, the payment so in default shall continue as an obligation
of the Company until the amount in default shall have been fully paid, and the
Company will pay interest on any overdue amount with respect to principal of
such Bond and, to the extent permitted by law, on any overdue amount with
respect to premium, if any, and interest on such Bond, at the interest rate then
borne by such Bond until paid.
SECTION 4.02. PAYMENTS OF PURCHASE PRICE. The Company shall pay or cause
to be paid for its account to the Trustee amounts equal to the amounts to be
paid by the Trustee as the purchase price for such Bonds pursuant to Section
3.01 and Section 3.02 of the Indenture in respect of Outstanding Bonds, such
amounts to be paid to the Trustee on the dates such payments are to be made
pursuant to Section 3.01 and Section 3.02 of the Indenture; provided, however,
that the obligation of the Company to make any such payment hereunder shall be
reduced by the amount of any moneys held by the Trustee under the Indenture and
available for such payment.
SECTION 4.03. PAYMENTS ASSIGNED; OBLIGATION ABSOLUTE. It is understood
and agreed that the Loan Payments are pledged and assigned by the Issuer to the
Trustee pursuant to the Indenture, and that all right, title and interest of the
Issuer hereunder (except for amounts payable to, and the rights of, the Issuer
under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06, Section 5.07,
Section 5.08 and Section 7.05 hereof and the Issuer's rights to receive notices,
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certificates, requests, requisitions, directions and other communications
hereunder) are pledged and assigned to the Trustee pursuant to the Indenture.
The Company assents to such pledge and assignment and agrees that the obligation
of the Company to make the Loan Payments and payments to the Trustee under
Section 4.02 hereof shall be absolute, irrevocable and unconditional and shall
not be subject to cancellation, termination or abatement, or to any defense
other than payment, or to any right of setoff, counterclaim or recoupment
arising out of any breach under this Agreement or the Indenture or otherwise by
the Company, the Trustee, the Remarketing Agent, the Provider, the Auction
Agent, the Broker-Dealer or any other party, and, further, that the Loan
Payments and the other payments due hereunder shall continue to be payable at
the times and in the amounts herein and therein specified whether or not the
Project, or any portion thereof, shall have been destroyed by fire or other
casualty, or title thereto, or the use thereof, shall have been taken by the
exercise of the power of eminent domain, and that there shall be no abatement of
or diminution in any such payments by reason thereof, whether or not the Project
shall be used or useful and whether or not any applicable laws, regulations or
standards shall prevent or prohibit the use of the Project or for any other
reason. The Project shall not constitute any part of the Trust Estate or any
part of the security for the Bonds.
SECTION 4.04. PAYMENT OF EXPENSES. The Company shall pay all of the
Administration Expenses of the Issuer, the Trustee, the Paying Agent, the
Registrar, the Auction Agent, the Broker Dealers, the Securities Depository,
Moody's and S&P under the Indenture and of any Remarketing Agent under a
Remarketing Agreement directly to each such entity. The Company shall also pay
all of the expenses of the Prior Trustee in connection with the Refunding and
all other reasonable fees and expenses incurred in connection with the issuance
of the Bonds, including, but not limited to, all costs associated with any
discontinuance of the book-entry system described in Section 2.16 of the
Indenture. The obligations of the Company under this Section 4.04 shall survive
the termination of this Agreement.
SECTION 4.05. INDEMNIFICATION. The Company releases the Trustee, the
Paying Agent and the Registrar and their respective officers, agents, servants
and employees from, agrees that the Trustee, the Paying Agent and the Registrar
and their respective officers, agents, servants and employees shall not be
liable for, and agrees to indemnify and hold free and harmless the Trustee, the
Paying Agent and the Registrar and their respective officers, agents, servants
and employees from and against, any liability for any loss or damage to property
or any injury to or death of any person that may be occasioned by any cause
whatsoever pertaining to the Project, except in any case as a result of the
negligence or willful misconduct of the Trustee, the Paying Agent and the
Registrar and their respective officers, agents, servants and employees.
The Company will indemnify and hold free and harmless the Trustee, the
Paying Agent and the Registrar and their respective officers, agents, servants
and employees from and against any loss, claim, damage, tax, penalty, liability,
disbursement, litigation or other expenses, attorneys' fees and expenses or
court costs arising out of, or in any way relating to, the execution or
performance of this Agreement, the Tax Certificate, the Auction Agreement, the
issuance or sale of the Bonds, the Refunding, the acceptance or administration
of the trust under the Indenture or any other cause whatsoever pertaining to
this Agreement, the Tax Certificate, the Indenture, the Auction Agreement or the
Credit Facility, except in any case as a result of the
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negligence or willful misconduct of the Trustee, the Paying Agent and the
Registrar or their respective officers, agents, servants and employees.
The obligations of the Company under this Section 4.05 shall survive the
termination of this Agreement.
SECTION 4.06. PAYMENT OF TAXES AND CHARGES IN LIEU THEREOF. (a) The
Company covenants and agrees that it will, from time to time for so long as the
Company has an ownership interest in the Project, promptly pay and discharge or
cause to be paid and discharged when due its share of all taxes, assessments,
levies, duties, imposts and governmental, utility and other charges lawfully
imposed upon the Project or any part thereof or upon income and profits thereof
or any payments hereunder. In the event that the Company sells or otherwise
transfers its interest in the Project while the Bonds are Outstanding, the
Company shall require the purchasers or transferor of the Company's interest in
the Project to assume the Company's obligations under this Section 4.06(a).
(b) The Company shall pay or cause to be satisfied and discharged or
make adequate provision to satisfy and discharge (including the provisions of
adequate bonding therefor) within 60 days after the same shall accrue, any lien
or charge upon the Loan Payments or payments under Section 4.02 hereof, and all
lawful claims or demands for labor, materials, supplies or other charges which,
if unpaid, might be or become a lien thereon.
(c) Notwithstanding subsections (a) and (b) of this Section, the Company
may, at its expense and in its own name and behalf or in the name and behalf of
the Issuer, in good faith contest any such liens, taxes, assessments and other
charges and, in the event of any such contest, may permit such liens, taxes,
assessments or other charges so contested to remain unpaid during the period of
such contest and any appeal therefrom; provided further that during such period
enforcement of such contested item is effectively stayed, unless by nonpayment
of any such items the lien of the Indenture as to the amounts payable hereunder
will be materially endangered, in which event the Company shall promptly pay and
cause to be satisfied and discharged all such unpaid items. The Issuer will
cooperate fully with the Company in any such contest. In the event that the
Company shall fail to pay any of the foregoing items required by this Section to
be paid by the Company, the Issuer may (but shall be under no obligation to) pay
the same, and any amounts so advanced therefor by the Issuer shall become an
additional obligation of the Company to the Issuer. The Company agrees to repay
the amounts so advanced, from the date thereof, together (to the extent
permitted by law) with interest thereon until paid at a rate per annum which is
one percentage point greater than the highest rate per annum then borne by any
of the Bonds.
SECTION 4.07. CREDIT FACILITY. (a) The Company may at any time provide
for a Change of Credit Facility, provided that the Company delivers to the
Trustee, any Auction Agent and any Remarketing Agent, not less than five
Business Days prior to the date on which the Trustee must notify the Owners of a
Change of Credit Facility pursuant to Section 2.18 of the Indenture and prior to
the effective date of any such Change of Credit Facility, the following:
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(1) a notice which (A) states the effective date of the Change
of Credit Facility, (B) describes the terms of the Change of Credit
Facility, and (C) directs the Trustee to give notice pursuant to Section
2.18(a) of the Indenture;
(2) a Favorable Opinion of Bond Counsel with respect to such
Change of Credit Facility and stating, in effect, that such change of
Credit Facility is authorized under this Agreement;
(3) a certificate of an Authorized Company Representative as to
whether the Bonds are then rated by either Moody's or S&P, or both; and
(4) written evidence from Moody's, if the Bonds are then rated
by Moody's, and from S&P, if the Bonds are then rated by S&P, in each
case to the effect that such rating agency has reviewed the proposed
Change of Credit Facility and that such Change of Credit Facility will
not, by itself, result in a reduction, suspension or withdrawal of its
rating or ratings of the Bonds.
(b) In lieu of satisfying the requirements of subsection (a) above, the
Company may provide for a Change of Credit Facility at any time that the Bonds
are subject to optional redemption pursuant to Section 4.02(b) of the Indenture,
provided that the Company delivers to the Trustee, any Auction Agent and any
Remarketing Agent not less than 30 days before the effective date of the Change
of Credit Facility:
(1) a notice which (A) states the effective date of the Change
of Credit Facility, (B) describes the terms of the Change of Credit
Facility, (C) directs the Trustee to give notice pursuant to Section
2.18 of the Indenture that the Bonds are subject to mandatory purchase,
in whole, on or before the effective date of the Change of Credit
Facility in accordance with Section 3.02(b) of the Indenture, and (D)
directs the Trustee to take any other action as shall be necessary for
the Trustee to take to effect the Change of the Credit Facility; and
(2) on or before the effective date of the Change of Credit
Facility, the Company shall furnish to the Trustee an opinion of Bond
Counsel satisfying the requirements of Section 4.07(a)(2) above.
(c) The Company may provide for one or more extensions of a Credit
Facility for any period commencing after its then-current expiration date
without complying with the foregoing provisions of this Section.
(d) The Company may rescind its election to make a Change of Credit
Facility at any time prior to the effective date thereof.
SECTION 4.08. COMPLIANCE WITH PRIOR AGREEMENT. The Company hereby
confirms its obligations under the Prior Agreement to furnish any moneys
required to be deposited with the Prior Trustee under the Prior Indenture in
order to redeem the Prior Bonds on the Redemption Date, to the extent that the
proceeds of the Bonds on deposit in the Prior Bond Fund, together
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with any investment earnings thereon, is less than the amount required to pay
the principal of and applicable redemption premium and interest on the Prior
Bonds upon their redemption on the Redemption Date, in accordance with the terms
and conditions of the Prior Indenture.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. MAINTENANCE OF EXISTENCE; CONDITIONS UNDER WHICH
EXCEPTIONS PERMITTED. The Company shall maintain in good standing its corporate
existence as a corporation organized under the laws of one of the states of the
United States or the District of Columbia and will remain duly qualified to do
business in the State for so long as the Company has an ownership interest in
the Project, will not dissolve or otherwise dispose of all or substantially all
of its assets and will not consolidate with or merge into another corporation;
provided, however, that the Company may, without violating the foregoing,
undertake from time to time any one or more of the following, if, prior to the
effective date thereof, such action is approved by all public utility
commissions or similar entities that are required by law to approve such action
and there shall have been delivered to the Trustee a Favorable Opinion of Bond
Counsel with respect to the contemplated action:
(a) consolidate or merge with another corporation or sell or
otherwise transfer to another entity all or substantially all of its
assets as an entirety, provided the resulting, surviving or transferee
entity, as the case may be, shall be (i) the Company or (ii) an entity
qualified to do business in the State as a foreign corporation or
incorporated and existing under the laws of the State which shall have
assumed in writing all of the obligations of the Company hereunder and
shall deliver to the Trustee an opinion of counsel to the Company that
such consolidation or merger complies with the provisions of this
Section 5.01; or
(b) convey all or substantially all of its assets to one or more
wholly-owned subsidiaries of the Company so long as the Company shall
remain in existence and primarily liable on all of its obligations
hereunder.
SECTION 5.02. PERMITS OR LICENSES. In the event that it may be necessary
for the proper performance of this Agreement on the part of the Company or the
Issuer that any application or applications for any permit or license to do or
to perform certain things be made to any governmental or other agency by the
Company or the Issuer, the Company and the Issuer each shall, upon the request
of either, execute such application or applications.
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SECTION 5.03. ARBITRAGE COVENANT. The Issuer, to the extent it has any
control over proceeds of the Bonds, and the Company covenant and represent to
each other and to and for the benefit of the Beneficial Owners that so long as
any of the Bonds remain Outstanding, moneys on deposit in any fund in connection
with the Bonds, whether such moneys were derived from the proceeds of the sale
of the Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Code and any lawful regulations promulgated thereunder, as the same exist on
this date or may from time to time hereafter be amended, supplemented or
revised. The Company also covenants for the benefit of the Beneficial Owners to
comply with all of the provisions of the Tax Certificate. The Company reserves
the right, however, to make any investment of such moneys permitted by State
law, if, when and to the extent that said Section 148 or regulations promulgated
thereunder shall be repealed or relaxed or shall be held void by final judgment
of a court of competent jurisdiction, but only upon receipt of a Favorable
Opinion of Bond Counsel with respect to such investment.
SECTION 5.04. FINANCING STATEMENTS. The Company shall, to the extent
required by law, file and record, refile and re-record, or cause to be filed and
recorded, refiled and re-recorded, all documents or notices, including the
financing statements and continuation statements, referred to in Section 5.05 of
the Indenture. The Issuer shall cooperate fully with the Company in taking any
such action. Concurrently with the execution and delivery of the Bonds, the
Company shall cause to be delivered to the Trustee the opinion of counsel
required pursuant to Section 5.05(a) of the Indenture.
SECTION 5.05. COVENANTS WITH RESPECT TO TAX-EXEMPT STATUS OF THE BONDS.
The Company covenants for the benefit of the Owners of the Bonds and the Issuer
that it (a) has not taken, and will not take or permit to be taken on its
behalf, any action which would adversely affect the Tax-Exempt status of the
Bonds and (b) will take, or require to be taken, such actions as may, from time
to time, be required under applicable law or regulation to continue to cause the
Bonds to be Tax-Exempt.
SECTION 5.06. INDEMNIFICATION OF ISSUER. (a) The Company agrees that the
Issuer, its elected or appointed officials, officers, agents, servants and
employees, shall not be liable for, and agrees that it will at all times
indemnify and hold free and harmless the Issuer, its elected or appointed
officials, officers, agents, servants and employees from and against, and pay
all expenses of the Issuer, its elected or appointed officials, officers,
agents, servants and employees relating to, (a) any lawsuit, proceeding or claim
arising in connection with the Project or this Agreement that results from any
action taken by or on behalf of the Issuer, its elected or appointed officials,
officers, agents, servants and employees pursuant to or in accordance with this
Agreement or the Indenture that may be occasioned by any cause whatsoever,
except the negligence or willful misconduct of the Issuer, its elected or
appointed officials, officers, agents, servants or employees, or (b) any
liability for any loss or damage to property or any injury to or death of any
person that may be occasioned by any cause whatsoever pertaining to the Project,
except the negligence or willful misconduct of the Issuer, its elected or
appointed officials, officers, agents, servants or employees. In case any action
shall be brought against the Issuer in respect of which indemnity may be sought
against the Company, the Issuer shall promptly notify the Company in writing and
the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Issuer and the payment of all expenses.
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Failure by the Issuer to notify the Company shall not relieve the Company from
any liability which it may have to the Issuer otherwise than under this Section
5.06. The Issuer shall have the right to employ separate counsel in any such
action and participate in the defense thereof, such counsel shall be paid by the
Issuer unless the employment of such counsel has been authorized by the Company.
The Company shall not be liable for any settlement of any such action without
its consent, but if any such action is settled with the consent of the Company
or if there be final judgment for the plaintiff in any such action, the Company
agrees to indemnify and hold free and harmless the Issuer, its elected or
appointed officials, officers, agents, servants and employees from and against
any loss or liability by reason of such settlement or judgment. The Company will
reimburse the Issuer, its elected or appointed officials, officers, agents,
servants and employees for any action taken pursuant to Section 5.03 of the
Indenture.
(b) The obligations of the Company under this Section 5.06 shall survive
the termination of this Agreement.
(c) It is the intention of the parties that the Issuer, its elected or
appointed officials, officers, agents, servants and employees shall not incur
any pecuniary liability by reason of the terms of this Agreement or the
Indenture, or the undertakings required of the Issuer hereunder or thereunder or
by reason of the issuance of the Bonds, the execution of the Indenture or the
performance of any act required of the Issuer by this Agreement or the Indenture
or requested of the Issuer by the Company.
SECTION 5.07. RECORDS OF COMPANY; MAINTENANCE AND OPERATION OF THE
PROJECT. (a) The Trustee and the Issuer shall be permitted at all reasonable
times during the term of this Agreement to examine the books and records of the
Company with respect to the Project; provided, however, that information and
data contained in the books and records of the Company shall be considered
proprietary and shall not be voluntarily disclosed by the Trustee or the Issuer
except as required by law.
(b) The Company shall cause the Project to be maintained in good repair
and shall cause the Project to be insured in accordance with standard industry
practice and shall pay all costs thereof. All proceeds of such insurance shall
be for the account of the Company.
(c) The Company shall be entitled to the proceeds of any condemnation
award or portion thereof made for damage to or taking of any of the Project or
other property of the Company.
(d) Anything in this Agreement to the contrary notwithstanding, the
Company shall have the right at any time to cause the operation of the Plant to
be terminated if the Company shall have determined or concurred in a
determination that the continued operation of the Plant is uneconomical for any
reason.
SECTION 5.08. RIGHT OF ACCESS TO THE PROJECT. The Company agrees that
the Issuer, the Trustee and their respective duly authorized agents shall have
the right, for so long as the Company has an ownership interest in the Project
and subject to such limitations, restrictions and requirements as the Company
may reasonably prescribe for plant security and safety reasons and
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in order to preserve secret processes and formulae, at all reasonable times to
enter upon and to examine and inspect the Project; provided, however, nothing
contained herein shall entitle the Issuer or the Trustee to any information or
inspection involving confidential material of the Company. Information and data
contained in the books and records of the Company shall be considered
proprietary and shall not be voluntarily disclosed by the Issuer or the Trustee
except as required by law. In the event that the Company sells or otherwise
transfers its interest in the Project, the Company shall require the purchaser
or transferee of the Company's interest in the Project to agree that the Issuer,
the Trustee and their respective duly authorized agents shall have the same
rights, and be subject to the same limitations, as are provided in this Section
with respect to the Project.
SECTION 5.09. REMARKETING AGENT. So long as any of the Bonds are subject
to optional or mandatory purchase pursuant to the provisions of the Indenture
(except during a Term Interest Rate Period that extends to the maturity of the
Bonds), the Company shall cause a Remarketing Agent to be appointed and acting
pursuant to a Remarketing Agreement at all such times as shall be necessary in
order to provide for the remarketing of the Bonds and the establishment of
interest rates to be borne by the Bonds in accordance with the provisions of the
Indenture.
SECTION 5.10. CREDIT RATINGS. The Company shall take all reasonable
action necessary to enable at least two nationally-recognized statistical rating
organizations (as that term is used in the rules and regulations of the
Securities and Exchange Commission under the Securities Exchange Act) to provide
credit ratings for the PARS Rate Bonds.
SECTION 5.11. PURCHASES OF PARS RATE BONDS. The Company shall not
purchase or otherwise acquire PARS Rate Bonds unless the Company redeems or
cancels such PARS Rate Bonds on the day of any such purchase.
SECTION 5.12. CREDIT FACILITY. Concurrently with the initial
authentication and delivery of the Bonds, the Company shall cause the original
Credit Facility to be delivered to the Trustee. Under the Credit Facility, the
Provider shall guarantee the payment of the principal of the Bonds upon the
stated maturity thereof and upon the mandatory redemption of the Bonds pursuant
to Section 4.03 of the Indenture and the payment of the interest on the Bonds as
the same accrues and becomes due and payable. The Issuer and the Company agree
to be bound by the provisions of the Indenture pertaining to the Credit
Facility.
ARTICLE VI
ASSIGNMENT
SECTION 6.01. CONDITIONS. The Company's interest in this Agreement may
be assigned in whole or in part by the Company: (a) to another entity, subject,
however, to the conditions that such assignment shall not relieve (other than as
described in Section 5.01(a)(ii) hereof) the Company from primary liability for
its obligations to make the Loan Payments or to make payments to the Trustee
under Section 4.02 hereof or for any other of its obligations hereunder, or (b)
to an Affiliate in connection with the conveyance of the Plant to such
Affiliate, subject,
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however, to the conditions that (i) such Affiliate is an entity described in
Section 5.01(a)(ii) hereof (in which case the Company shall be relieved of all
obligations hereunder); (ii) such conveyance is approved by any public utility
commissions or similar entities that are required by law to approve such
conveyance; and (iii) the Company shall have delivered to the Trustee (A) an
opinion of counsel to the Company that such assignment complies with the
provisions of this Section 6.01 and (B) a Favorable Opinion of Bond Counsel with
respect to such assignment.
SECTION 6.02. DOCUMENTS FURNISHED TO TRUSTEE. The Company shall, within
30 days after the delivery thereof, furnish to the Issuer and the Trustee a true
and complete copy of the agreements or other documents effectuating any
assignment pursuant to Section 6.01 hereof. The Trustee's only duties with
respect to any such agreement or other document so furnished to it shall be to
make the same available for examination by any Owner at the Principal Office of
the Trustee upon reasonable notice.
SECTION 6.03. LIMITATION. This Agreement shall not be assigned in whole
or in part, except as provided in this Article VI or in Section 4.03 or Section
5.01 hereof.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. EVENTS OF DEFAULT. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) a failure by the Company to make when due any Loan Payment
or any payment required under Section 4.01 or Section 4.02 hereof, which
failure shall have resulted in an "Event of Default" under Section
9.01(a), Section 9.01(b) or Section 9.01(c) of the Indenture;
(b) a failure by the Company to pay when due any amount required
to be paid under this Agreement or to observe and perform any covenant,
condition or agreement on its part to be observed or performed under
this Agreement (other than a failure described in Section 7.01(a)
above), which failure shall continue for a period of 90 days (or such
longer period as the Issuer and the Trustee may agree to in writing)
after written notice, specifying such failure and requesting that it be
remedied, shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Issuer; provided, however, that if such
failure is other than for the payment of money and is of such nature
that it cannot be corrected within the applicable period, such failure
shall not constitute an "Event of Default" so long as the Company
institutes corrective action within the applicable period and such
action is being diligently pursued;
(c) the dissolution or liquidation of the Company; or the filing
by the Company of a voluntary petition in bankruptcy; or failure by the
Company promptly to lift or bond any execution, garnishment or
attachment of such consequence as will impair its ability to make any
payments under this Agreement; or the filing of a petition or answer
proposing
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the entry of an order for relief by a court of competent jurisdiction
against the Company under Title 11 of the United States Code, as the
same may from time to time be hereafter amended, or proposing the
reorganization, arrangement or debt readjustment of the Company under
the provisions of any bankruptcy act or under any similar act which may
be hereafter enacted and the failure of said petition or answer to be
discharged or denied within ninety (90) days after the filing thereof or
the entry of an order for relief by a court of competent jurisdiction in
any proceeding for its liquidation or reorganization under the
provisions of any bankruptcy act or under any similar act which may be
hereafter enacted; or an assignment by the Company for the benefit of
its creditors; or the entry by the Company into an agreement of
composition with its creditors (the term "dissolution or liquidation of
the Company," as used in this subsection (c), shall not be construed to
include the cessation of the corporate existence of the Company
resulting either from a merger or consolidation of the Company into or
with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all its assets as an
entirety, under the conditions permitting such actions contained in
Section 5.01 hereto; or
(d) receipt by the Trustee of written notice from Ambac that an
Event of Default has occurred under the initial Credit Facility
Agreement or the occurrence of an event described in any subsequent
Credit Facility Agreement that is designated therein as giving rise to
an Event of Default hereunder.
SECTION 7.02. FORCE MAJEURE. The provisions of Section 7.01(b) hereof
are subject to the following limitations: if by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States or the State, or any department,
agency, political subdivision, court or official of any of such State or any
other state which asserts regulatory jurisdiction over the Company; orders of
any kind of civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes;
storms; floods; washouts; droughts; arrests; restraint of government and people;
civil disturbances; explosions; breakage or accident to machinery; partial or
entire failure of utilities; or any cause or event not reasonably within the
control of the Company, the Company is unable in whole or in part to carry out
any one or more of its agreements or obligations contained herein, other than
its obligations under Section 4.01, Section 4.02, Section 4.04, Section 4.05,
Section 4.06, Section 5.01 and Section 5.06 hereof, the Company shall not be
deemed in default by reason of not carrying out said agreement or agreements or
performing said obligation or obligations during the continuance of such
inability. The Company shall make reasonable effort to remedy with all
reasonable dispatch the cause or causes preventing it from carrying out its
agreements, provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company,
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the judgment of the Company unfavorable
to the Company.
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SECTION 7.03. REMEDIES. (a) Upon the occurrence and continuance of any
Event of Default described in Section 7.01(a) or Section 7.01(c) hereof, and
further upon the condition that, in accordance with the terms of the Indenture,
the Bonds shall have been declared to be immediately due and payable pursuant to
any provision of the Indenture, the Loan Payments shall without further action,
become and be immediately due and payable.
(b) Any waiver of any "Event of Default" under the Indenture and a
rescission and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Agreement and a rescission
and annulment of the consequences thereof.
(c) Upon the occurrence and continuance of any Event of Default, the
Issuer may take any action at law or in equity to collect any payments then due
and thereafter to become due hereunder or to seek injunctive relief or specific
performance of any obligation, agreement or covenant of the Company hereunder.
(d) Any amounts collected from the Company pursuant to this Section 7.03
shall be applied in accordance with the Indenture. No action taken pursuant to
this Section 7.03 shall relieve the Company from the Company's obligations
pursuant to Section 4.01 or Section 4.02 hereof.
SECTION 7.04. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer hereby is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer to exercise any remedy reserved to it in this Article VII, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required.
SECTION 7.05. REIMBURSEMENT OF ATTORNEYS' FEES. If the Company shall
default under any of the provisions hereof and the Issuer or the Trustee shall
employ attorneys or incur other reasonable and proper expenses for the
collection of payments due hereunder or for the enforcement of performance or
observance of any obligation or agreement on the part of the Company contained
herein, the Company will on demand therefor reimburse the Issuer or the Trustee,
as the case may be, for the reasonable and proper fees of such attorneys and
such other reasonable and proper expenses so incurred.
SECTION 7.06. WAIVER OF BREACH. In the event any obligation created
hereby shall be breached by either of the parties hereto and such breach shall
thereafter be waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. In view of the assignment of certain of the Issuer's rights and
interest hereunder to the Trustee, the Issuer shall have no power to waive any
Event of Default hereunder by the Company in respect of such rights and interest
without the consent of the Trustee, and the Trustee may exercise any of the
rights of the Issuer hereunder.
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ARTICLE VIII
PURCHASE OR REDEMPTION OF BONDS
SECTION 8.01. REDEMPTION OF BONDS. The Issuer shall take or cause to be
taken the actions required by the Indenture (other than the payment of money) to
discharge the lien thereof through the redemption, or provision for payment or
redemption, of all Bonds then Outstanding, or to effect the redemption, or
provision for payment or redemption, of less than all the Bonds then
Outstanding, upon receipt by the Issuer and the Trustee from an Authorized
Company Representative of a written notice designating the principal amount of
the Bonds to be redeemed and specifying the date of redemption (which, unless
waived by the Issuer and the Trustee, shall not be less than 30 days from the
date such notice is given, or such shorter period as the Trustee and the Company
may agree from time to time) and the applicable redemption provision of the
Indenture. Unless otherwise stated therein and except with respect to a
redemption under Section 4.03 of the Indenture, such notice shall be revocable
by the Company at any time prior to the time at which the Bonds to be redeemed,
or for the payment or redemption of which provision is to be made, are first
deemed to be paid in accordance with Article VIII of the Indenture. The Company
shall furnish any moneys required by the Indenture to be deposited with the
Trustee or otherwise paid by the Issuer in connection with any of the foregoing
purposes. In connection with any redemption of the Bonds, the Company shall
provide to the Trustee the names and addresses of the Securities Depositories
and Information Services as contemplated by Section 4.05 of the Indenture.
SECTION 8.02. PURCHASE OF BONDS. The Company may at any time, and from
time to time, furnish moneys to the Trustee accompanied by a notice directing
such moneys to be applied to the purchase of Bonds in accordance with the
provisions of the Indenture delivered pursuant to the Indenture, which Bonds
shall, at the direction of the Company, be delivered in accordance with Section
3.06(a)(ii) of the Indenture.
SECTION 8.03. OBLIGATION TO PREPAY. (a) The Company shall be obligated
to prepay in whole or in part the amounts payable hereunder upon a Determination
of Taxability (as defined below) giving rise to a mandatory redemption of the
Bonds pursuant to Section 4.03 of the Indenture, by paying an amount equal to,
when added to other funds on deposit in the Bond Fund, the aggregate principal
amount of the Bonds to be redeemed pursuant to the Indenture plus accrued
interest to the redemption date.
(b) The Company shall cause a mandatory redemption to occur within 180
days after a Determination of Taxability (as defined below) shall have occurred.
A "Determination of Taxability" shall be deemed to have occurred if, as a result
of the failure of the Company to observe any covenant, agreement or
representation in this Agreement, a final decree or judgment of any federal
court or a final action of the Internal Revenue Service determines that interest
paid or payable on any Bond is or was includible in the gross income of an Owner
of the Bonds for federal income tax purposes under the Code (other than an Owner
who is a "substantial user" or "related person" within the meaning of Section
147(a) of the Code). However, no such decree or action will be considered final
for this purpose unless the Company has been given written notice of the same,
either directly or in the name of any Owner of a Bond, and, if it so desires and
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is legally allowed, has been afforded the opportunity to contest the same,
either directly or in the name of any Owner of a Bond, and until conclusion of
any appellate review, if sought. If the Trustee receives written notice from any
Owner of a Bond stating (a) that the Owner has been notified in writing by the
Internal Revenue Service that it proposes to include the interest on any Bond in
the gross income of such Owner for the reasons described therein or any other
proceeding has been instituted against such Owner which may lead to a final
decree or action as described herein, and (b) that such Owner will afford the
Company the opportunity to contest the same, either directly or in the name of
the Owner, until a conclusion of any appellate review, if sought, then the
Trustee shall promptly give notice thereof to the Company, the Issuer, the
Provider and the Owner of each Bond then Outstanding. If a final decree or
action as described above thereafter occurs and the Trustee has received written
notice thereof as provided in Section 8.01 hereof at least 45 days prior to the
redemption date, the Trustee shall request prepayment from the Company of the
amounts payable hereunder and give notice of the redemption of the Bonds at the
earliest practical date, but not later than the date specified in this Article,
and in the manner provided by Section 4.05 of the Indenture.
At the time of any such prepayment of the amounts payable hereunder
pursuant to this Section, the prepayment amount shall be applied, together with
other available moneys in the Bond Fund, to the redemption of the Bonds on the
date specified in the notice as provided in the Indenture, whether or not such
date is an Interest Payment Date, to the Trustee's fees and expenses under the
Indenture accrued to such redemption of the Bonds, and to all sums due to the
Issuer under this Agreement.
Whenever the Company shall have given any notice of prepayment of the
amounts payable hereunder pursuant to this Article VIII, which includes a notice
for redemption of the Bonds pursuant to the Indenture, all amounts payable under
the first paragraph of this Section 8.03 shall become due and payable on the
date fixed for redemption of such Bonds.
SECTION 8.04. COMPLIANCE WITH INDENTURE. Anything in this Agreement to
the contrary notwithstanding, the Issuer and the Company shall take all actions
required by this Agreement and the Indenture in order to comply with the
provisions of Articles III and IV of the Indenture.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. TERM OF AGREEMENT. This Agreement shall remain in full
force and effect from the date of delivery hereof until the right, title and
interest of the Trustee in and to the Trust Estate shall have ceased, terminated
and become void in accordance with Article VIII of the Indenture and until all
payments required under this Agreement shall have been made. The date first
above written shall be for identification purposes only and shall not be
construed to imply that this Agreement was executed on such date.
SECTION 9.02. NOTICES. Except as otherwise provided in this Agreement,
all notices, certificates, requests, requisitions and other communications
hereunder shall be in writing and
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shall be sufficiently given and shall be deemed given when mailed by Mail or by
certified or registered mail postage prepaid, or by overnight delivery service,
addressed as follows (and, if by overnight delivery service and required by the
chosen delivery service, with then-current telephone number of the addressee):
if to the Issuer, at Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention: Mayor; if to
the Company, at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Treasurer; if to the Trustee, at such address as shall be designated by it in or
pursuant to the Indenture; if to the Auction Agent, if any, at such address as
shall be designated by such party pursuant to the Auction Agreement; if to the
Provider of the Credit Facility, at such address as shall be designated by it in
or pursuant to the Indenture; and if to the Remarketing Agent, if any, at such
address as shall be designated by such party pursuant to the Remarketing
Agreement. A copy of each notice, certificate, request or other communication
given hereunder to the Issuer, the Company, the Trustee, the Auction Agent, the
Provider and the Remarketing Agent shall also be given to the others. Any of the
foregoing parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
SECTION 9.03. PARTIES IN INTEREST. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, and no other person, firm or corporation
shall have any right, remedy or claim under or by reason of this Agreement
except for rights of payment and indemnification hereunder of the Trustee and
the Registrar. Section 9.05 hereof to the contrary notwithstanding, for purposes
of perfecting a security interest in this Agreement by the Trustee, only the
counterpart delivered, pledged and assigned to the Trustee shall be deemed the
original. No security interest in this Agreement may be created by the transfer
of any counterpart thereof other than the original counterpart delivered,
pledged and assigned to the Trustee.
SECTION 9.04. AMENDMENTS. This Agreement may be amended only by written
agreement of the Company and the Issuer and with the written consent of the
Trustee in accordance with the provisions of Section 12.05 or 12.06 of the
Indenture, as applicable; provided, however, that Exhibit A to this Agreement
may be amended upon compliance only with the requirements of Section 3.04
hereof.
SECTION 9.05. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which, when so executed and delivered, shall be an
original (except as expressly provided in Section 9.03 hereof), and such
counterparts shall together constitute but one and the same Agreement.
SECTION 9.06. SEVERABILITY. If any clause, provision or Section of this
Agreement shall, for any reason, be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
SECTION 9.07. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the laws of the State.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CITY OF FORSYTH, MONTANA
By:
--------------------------------
Mayor
[SEAL]
ATTEST:
By:
--------------------------------
City Clerk
AVISTA CORPORATION
By:
--------------------------------
Vice President & Treasurer
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EXHIBIT A
PROJECT DESCRIPTION
1. POLLUTION CONTROL EQUIPMENT
SCRUBBER SYSTEM
The air pollution control facilities employed on Units #3 and #4 consist
of a complete scrubber system, including duct work, plenums, scrubber vessels,
reheaters and induced draft fans, together with infrastructures, monitoring and
electrical controls and instrumentation therefore, for the purpose of removing
the sulfur dioxide (SO2) and particulate matter from the flue gas. The scrubber
system also includes a scrubber maintenance facility, including a machine shop
and laboratory dedicated to the scrubber system and an environmental monitoring
laboratory for the pollution control facilities. The scrubber system utilizes
the Wet Venturi Principle and consists of eight modules for each unit through
which the steam generator gases from the burned coal must pass.
The gases in the scrubber are contacted with finely atomized scrubber
slurry. Within the stated performance of the system, fly ash particulates are
removed by the slurry droplets. The sulfur dioxide reacts with the alkali
contained in the slurry which results from the mixing of water, fly ash
particulates, hydrated high calcium lime and hydrated dolomitic lime. A major
portion of the sulfur dioxide is converted to solid sulfate compounds which are
retained in the scrubber liquid and can, therefore, be piped to and deposited in
an ash pond together with the particulate.
After the flue gas passes through the venturi section, absorption sprays
and wash trays, it is processed through a demister which removes any entrained
slurry and is then reheated and discharged through the stack.
The slurry system in the Units #3 and #4 scrubber system consists of
recycle tanks, regenerators, agitators, pumps and pipelines. The slurry from the
Units #3 and #4 scrubber system is transported to an effluent holding pond and
involves the use of effluent holding tanks, agitators, pumps and pipelines. A
separate wash tray pond system is used to store the suspended solids collected
from the wash tray system. Reclaimed water from the clear water section of these
ponds is circulated back to the scrubber system.
LIME STORAGE
The sole purpose of the lime system is to supply the lie slurry
requirements of the scrubber regeneration system. There is one lime system that
serves the sixteen scrubbers for Units #3 and #4. Major components of the system
include four slakers, in which calcined high calcium lime is reacted with water
to produce a hydrated lime slurry, slurry transfer tanks, where
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the slurry is diluted with water and mixed with dry hydrated dolomitic lime,
slurry feed storage tanks, where the slurry will be held for use by the
regenerators as needed, hydrators, for mixing calcined dolomitic lime with
water, and agitators.
SCRUBBER SLUDGE DISPOSAL
Effluent slurry is pumped from the plant to the sludge disposal pond
located approximately three miles southeast of the plant. The suspended solids
settle to the pond bottom and the clear water is pumped back to the plant.
There are two phases in the development of this pond. The first phase
requires the construction of one dam 108 feet high and 1,100 feet in length. A
saddle dam must also be added. The saddle dam will vary in height with a maximum
height for this phase of 36 feet and be approximately 2,800 feet in length. The
capacity of Phase 1 will be 6,650 acre-feet and it will last approximately 10
years.
The development of the second phase will require that the original dam
be raised to 138 feet in height and increased to a length of 2,500 feet. The
saddle dam will be raised to a maximum height of 66 feet and a total length of
3,500 feet. The capacity of the second phase will be an additional 7,000
acre-feet and it will last approximately 12 years, for a total life of 22 years.
The construction of the second phase is not included in cost reported at this
time.
The sludge disposal pond design takes into account a permit requirement
for minimum seepage, by providing low permeability plastic concrete filled
trenches around the periphery of the pond constructed during the course of Phase
1 work.
COAL DUST CONTROL SYSTEM
The coal dust control system is designed to collect, store and treat
coal dust resulting from mining, crushing, handling and storing coal in the
course of normal Units #3 and #4 operations. To control coal dust air pollution
the points where coal is transferred between conveyors or placed in coal piles
have been enclosed. The coal transfer stations between conveyors are enclosed
with steel framed structures with metal siding. The structures are equipped with
vacuum filtration systems, consisting of ducts, blowers, dust removal filters
and associated equipment, to remove coal dust from exhaust air from the
structures, and are also equipped with mechanical dust collectors. The main line
45,000 ton coal storage pile is enclosed with a 340' long A-frame precast panel
concrete structure designed to contain coal dust, thereby allowing its removal
and treatment.
COOLING TOWER DRIFT CONTAINMENT CONTROL FACILITY
Operation of the cooling towers produces exhaust air emissions
containing circulating water, particulates and other pollutants generally known
as cooling tower drift. To control release of these air pollutants, the cooling
towers are provided with high efficiency drift eliminators, located at the top
of the cooling tower structures, which remove drift from the cooling tower
exhaust air.
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2. SOLID WASTE DISPOSAL
BOTTOM ASH DISPOSAL
The function of the bottom ash disposal system is to remove
accumulations of furnace bottom ash, pulverizer pyrites, economizer ash, and air
preheater fly ash by means of a water-ash slurry to a disposal pond located
approximately 2,000 feet southeast of the plant site. The system consists
generally of three sets of fly ash hoppers, (economizer, air heater, and flue
gas duct hoppers) pyrite hoppers, the bottom ash xxxxxx, and 18,000 gallon
transfer tank, a settling pond, a clear water pond and various pumps, and
pipelines.
Clinker grinders are used to grind the bottom ash which is then mixed
with water and sluiced to the ash transfer tank.
The economizer ash collected in economizer hoppers falls by gravity to
the ash transfer tank.
The pyrites are collected in local tanks and sluiced to the ash transfer
tank.
Ash collected in the flue gas duct hoppers and air preheater hoppers is
sluiced to the ash transfer tank.
These ashes are pumped from the ash transfer tank to the bottom ash
pond. Reclaimed water is returned from the bottom ash disposal pond and
redistributed to the various sections of the bottom ash disposal system.
The solid waste disposal facilities for purposes of the issuance of the
Bonds include only so much of the bottom ash disposal system as is external to
the plant building and include piping from the building to the settling pond,
the pond itself, return water pumps and lines, a clear water pond and piping
back to the plant building.
3. WATER POLLUTION CONTROL
NORTH PLANT SEDIMENT POND
The north plant sediment pond is designed to collect and store the storm
runoff from the general north plant area. These waters are retained in the pond,
allowing natural evaporation to desiccate the pond. This prevents high
quantities of suspended solids from being discharged to Armells Creek or other
state surface waters.
NORTH PLANT AREA DRAINAGE SYSTEM
The north plant area drainage system is designed to collect and store
storm runoff from the water treatment building, fuel oil handling area and the
cooling tower area in the north plant area drain pond. The pond also serves as a
storage facility for one cooling tower basin drain,
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cooling tower overflow, water treatment filter backwash, and for the cooling
tower blowdown water not used in the flue gas scrubbing process. These waters
are potentially contaminated with oil and high suspended and dissolved solids,
and this system stores these discharges preventing any discharge to Armells
Creek or other state surface waters. The north plant area drainage system
consists of collection basins, piping, concrete culverts, yard drains, manholes
and special yard gradings (berms) which route these discharges to the north
plant area sump and north plant area drain pond. The north plant area drain pond
incorporates a hypalon liner to comply with a permit requirement for minimum
seepage. The oil separator section of the sump receives oily surface collection
drains. The oil and water are separated. The oil from the sump is then trucked
away for disposal.
The water discharges are either pumped to the scrubber effluent holding
pond via a 6" diameter pipeline, 19,000 feet in length for evaporation, to the
circulating water system, or the plant oily waste sump as appropriate. Each
discharge arrangement has its own set of sump pumps. The pumps and piping system
which discharge to the plant oily waste sump are not included in the costs
covered by this Report, nor is the circulating water system. The waters
recovered are excess to any plant requirements and recovery of the waters does
not provide any economic benefit to the plant.
CHEMICAL AND OILY WASTE SYSTEM
The chemical and oily waste system is designed to collect, store, treat
and dispose of chemical and oily wastes resulting from the normal operation of
Units #3 and #4. This system consists of drains and pipes, oil separators,
chemical waste sumps, chemical waste neutralizing tanks, neutralizing chemical
storage tanks, chemical inspection equipment, and associated mechanical and
electrical control equipment.
The chemical waste drainage system includes drains and neutralization
tanks for collection and treatment of chemical waste Chemical waste drains are
located throughout Units #3 and #4, and are used to collect and transfer
chemical waste to holding sumps and neutralization tanks. The neutralization
equipment includes chemical storage and injection equipment as well as controls
and instrumentation.
The oily waste drainage system is made up of a network of drains which
collect oily waste from throughout Units #3 and #4, and dispose of the wastes in
the Units #3 and #4 main water-oil sump. Oil separation xxxxxxxx in the sump
allow for oil removal. The treated water is monitored for trace oil levels and
released. After separation, the waste oil is removed by a contractor to an
offsite disposal area.
COOLING TOWER BLOWDOWN SYSTEM
The cooling tower blowdown system consists of a 6" pipeline from the
cooling tower to the waste disposal pond where the blowdown is treated by
settlement and evaporation in accordance with water pollution control
requirements.
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GROUNDWATER MONITORING XXXXX
Groundwater monitoring xxxxx have been installed around the various
ponds associated with the plant operation. These ponds include the scrubber
effluent holding pond, the scrubber drain pond, the scrubber wash tray pond, the
bottom ash pond, and the north plant area effluent pond. These groundwater
monitoring xxxxx provide the ability through sampling to detect and quantify
accidental discharges from the above mentioned plant storage and waste ponds.
This is necessary to show compliance with State Groundwater Standards and with
permit requirements for minimum seepage.
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