EXHIBIT 4.27
EXECUTION COPY
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LOAN AGREEMENT
Between
MARICOPA COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
and
EL PASO ELECTRIC COMPANY
relating to
$37,100,000
Maricopa County, Arizona
Pollution Control Corporation
Pollution Control Refunding Revenue Bonds, 2002 Series A
(El Paso Electric Company, Palo Verde Project)
Dated as of August 1, 2002
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions of Terms ...................................... 2
Section 1.02 Interpretation ............................................ 7
Section 1.03 Captions and Headings ..................................... 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties of the Issuer .............. 7
Section 2.02 Representations and Warranties of the Borrower ............ 7
ARTICLE III
[RESERVED]
ARTICLE IV
[RESERVED]
ARTICLE V
LOAN TO BORROWER; REPAYMENT PROVISIONS
Section 5.01 Loan to Borrower .......................................... 9
Section 5.02 Amounts and Dates for Payment ............................. 9
Section 5.03 Payments by Borrower to be Assigned to the Trustee;
Obligation for Payments Absolute ......................... 10
Section 5.04 Payment of Expenses ....................................... 10
Section 5.05 Issuer Access to Facilities ............................... 10
Section 5.06 Maintenance of Facilities ................................. 10
Section 5.07 Insurance ................................................. 11
Section 5.08 Indemnification of Issuer; Statements for Services ........ 11
Section 5.09 Notices of Damage ......................................... 13
Section 5.10 No Warranty by the Issuer ................................. 13
Section 5.11 Liens ..................................................... 14
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Section 5.12 Payments of Taxes and Assessments; No Liens or Charges ... 14
Section 5.13 Additional Payments by the Borrower ......... ............ 14
ARTICLE VI
SPECIAL COVENANTS; CREDIT FACILITY
Section 6.01 [RESERVED] ............................................... 14
Section 6.02 Maintenance of Existence ................................. 14
Section 6.03 Agreement as to Ownership and Use of the Project ......... 15
Section 6.04 Cooperation in Applications for Permits and Licenses ..... 15
Section 6.05 Recordation and Other Instruments ........................ 15
Section 6.06 Issuer's Access to Facilities ............................ 15
Section 6.07 Tax Covenants ............................................ 15
Section 6.08 Credit Facility .......................................... 16
Section 6.09 Annual Statement ......................................... 17
ARTICLE VII
[RESERVED]
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default ........................................ 18
Section 8.02 Force Majeure ............................................ 18
Section 8.03 Remedies ................................................. 19
Section 8.04 No Remedy Exclusive ...................................... 19
Section 8.05 Reimbursement of Attorneys' Fees ......................... 20
Section 8.06 Waiver of Breach ......................................... 20
ARTICLE IX
OPTIONS OF BORROWER TO PREPAY.
Section 9.01 Options of Borrower to Prepay Repayment Installments ..... 20
Section 9.02 Exercise of Option ....................................... 20
Section 9.03 Mandatory Prepayment of Repayment Installments ........... 21
Section 9.04 Amount of Prepayment ..................................... 21
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ARTICLE X
PURCHASE AND REMARKETING OF BONDS
Section 10.01 Purchase of Bonds ........................................ 21
Section 10.02 Optional Purchase of Bonds ............................... 22
Section 10.03 Determination of Interest Rate Periods ................... 22
ARTICLE XI
MISCELLANEOUS
Section 11.01 Term of Agreement ..................................... 22
Section 11.02 Notices ............................................... 22
Section 11.03 Parties in Interest ................................... 23
Section 11.04 Extent of Covenants of the Issuer; No Personal
Liability ............................................ 23
Section 11.05 Confirmation of Request by the Borrower ............... 24
Section 11.06 Amendments ............................................ 24
Section 11.07 Counterparts .......................................... 24
Section 11.08 Severability .......................................... 24
Section 11.09 Governing Law; Venue. ................................. 24
Section 11.10 Statutory Notice. ..................................... 24
EXHIBIT A DESCRIPTION OF THE PROJECT
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of August 1, 2002 (this "Agreement"), is
made by and between MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION, a
nonprofit corporation designated as a political subdivision of the State of
Arizona, incorporated for and with the approval of the County of Maricopa,
Arizona, existing under the Constitution and laws of the State of Arizona (the
"Issuer"), and EL PASO ELECTRIC COMPANY, a corporation organized and existing
under the laws of the State of Texas (the "Borrower").
W I T N E S S E T H :
WHEREAS, Title 35, Chapter 6, Arizona Revised Statutes (formerly Title
9, Chapter 12, Arizona Revised Statutes, enacted by Chapter 69, Section 2, Laws
of Arizona of 1972), as amended (hereinafter called the "Act"), empowers any
pollution control corporation organized pursuant to Article 1 of the Act to
issue revenue bonds in accordance with Article 2 of the Act and to make secured
or unsecured loans for the purpose of financing or refinancing the acquisition,
construction, improvement or equipping of pollution control facilities, to
charge and collect interest on such loans and pledge the proceeds of loan
agreements as security for the payment of the principal of and interest on
bonds, or designated issues of bonds, issued by the corporation and any
agreements made in connection therewith, whenever the board of directors finds
such loans to be in furtherance of the purposes of the corporation; and
WHEREAS, Chapter 69, Section 1, Laws of Arizona of 1972 declares it to
be the purpose of the Act to authorize the incorporation in the several
municipalities and counties of the State of Arizona (the "State") of
corporations which shall constitute political subdivisions of the State, to
finance the acquisition and installation of, or the construction and leasing of,
properties, machinery and equipment intended to prevent or limit air, water and
other forms of pollution for the purpose of protecting the health and welfare of
the citizens of the State, and to facilitate compliance with existing or future
air, water and other quality standards designed to improve the environment, and
declares that such corporations shall serve a public purpose and perform an
essential governmental function; and
WHEREAS, in response to an application by four qualified electors of
the County of Maricopa, Arizona (the "County"), a political subdivision of the
State, the Board of Supervisors of said County on December 5, 1983, adopted a
resolution by which it determined that it was wise, expedient, advisable and in
the public interest that said application be approved, approved said
application, and authorized said four electors to proceed with the incorporation
of the Issuer as a pollution control corporation for said County, all in
accordance with Section 35-802 of the Act to issue bonds and to carry out the
other functions and fulfill the purposes of the Issuer; and
WHEREAS, the Issuer was thereupon organized and incorporated in
accordance with the provisions of the Act, and, on December 5, 1983, the
Articles of Incorporation of the Issuer were filed with the Arizona Corporation
Commission, in accordance with Section 35-809 of the Act; and
WHEREAS, the Issuer has heretofore issued and sold its $37,100,000
aggregate principal amount of Pollution Control Refunding Revenue Bonds, 1984
Series E (El Paso Electric
Company Palo Verde Project) (the "Prior Bonds"), the proceeds of which were used
to finance and refinance a portion of the costs of acquisition, construction,
improvement or equipping of the Project; and
WHEREAS, the Issuer intends to issue its Pollution Control Refunding
Revenue Bonds, 2002 Series A (El Paso Electric Company, Palo Verde Project) (the
"Bonds") pursuant to an Indenture of Trust dated as of August 1, 2002, between
the Issuer and JPMorgan Chase Bank, as Trustee, and to lend the proceeds of the
Bonds to the Borrower for the purpose of providing a portion of the moneys
necessary to refund the outstanding principal amount of the Prior Bonds; and
WHEREAS, the appropriate agencies exercising jurisdiction over the
Project have certified that the Project, as described in Exhibit A hereto, as
designed, is in furtherance of the purpose of abating or controlling atmospheric
or water pollutants or contaminants resulting from the generation of electricity
at the Plant;
NOW, THEREFORE, in consideration of the premises and the respective
representations and covenants herein contained, the parties hereto agree as
follows (provided, that in the performance of the agreements of the Issuer
herein contained, any obligation it may thereby incur shall not constitute or
give rise to a pecuniary liability or a charge upon its general credit or
against its taxing powers but shall be payable solely out of the Receipts and
Revenues (as defined in the hereinafter defined Indenture) derived from this
Agreement and the Bonds):
ARTICLE I
DEFINITIONS
Section 1.01 Definitions of Terms.
As used herein:
"Act" shall mean Title 35, Chapter 6, Arizona Revised Statutes
(formerly Title 9, Chapter 12, Arizona Revised Statutes, enacted by Chapter 69,
Section 2, Laws of Arizona of 1972), and all acts supplemental thereto or
amendatory thereof.
"Administration Expenses" shall mean the reasonable expenses incurred
by the Issuer with respect to this Agreement, the Indenture and any transaction
or event contemplated by this Agreement or the Indenture, including, without
limitation, the reasonable fees and disbursements of counsel and out-of-pocket
expenses of the Issuer incurred in connection with the authorization, issuance
and sale of the Bonds and the compensation and reimbursement of reasonable fees,
expenses and advances payable to the Trustee, the Registrar, the Paying Agent,
the Tender Agent, the Bank and the Remarketing Agent under the Indenture.
"Agreement" shall mean this Loan Agreement dated as of August 1, 2002
and any and all modifications, alterations, amendments and supplements hereto.
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"Alternate Credit Support" shall mean any letter of credit, credit
facility, insurance policy, guarantee or other credit support agreement or
security mechanism provided by the Borrower in accordance with Section 6.08
hereof and any extension thereof.
"Authorized Borrower Representative" shall mean each person at the time
designated to act on behalf of the Borrower by written certificate furnished to
the Issuer and the Trustee containing the specimen signature of such person and
signed on behalf of the Borrower.
"Bank" shall mean the issuer of a Letter of Credit, if any, delivered
in conjunction with the Bonds, and the issuer of any subsequently issued Credit
Facility so long as such other Credit Facility shall be in effect, and in its
capacity as such issuer, its successors in such capacity and their assigns.
"Bond" or "Bonds" shall mean the bonds authorized to be issued under
the Indenture.
"Bond Counsel" shall mean any firm of nationally recognized bond
counsel experienced in the financing of pollution control facilities and
acceptable to the Issuer, the Remarketing Agent, the Trustee and the Borrower.
"Bond Fund" shall mean the fund created by Section 5.01 of the
Indenture.
"Borrower" shall mean El Paso Electric Company, a corporation formed
and existing under the laws of the State of Texas, its successors and their
assigns and any transferee entity to the extent permitted by Section 6.02
hereof.
"Borrower Indentures" shall mean (i) that certain Indenture of
Mortgage, dated as of October 1, 1946, between the Borrower and State Street
Bank and Trust Company, as trustee, as supplemented and modified by the
indentures supplemental thereto, (ii) that certain Indenture of Mortgage, dated
as of June 1, 1981, from the Borrower to IBJ Xxxxxxxx Bank & Trust Company, as
successor trustee, as the same has heretofore been supplemented and may be
hereafter supplemented and modified or (iii) any indenture or mortgage made by
the Borrower in accordance with the Plan to secure substantially the same
obligations as are currently secured by the Borrower Indentures, and subjecting
thereto substantially the same property, and subject to substantially the same
prior liens and encumbrances, and having substantially similar provisions for
the issuance of additional debt thereunder, as the Borrower Indentures.
"Claim" shall mean liabilities, obligations, losses, damages, taxes
(other than taxes on income), penalties, claims (including, without limitation,
claims involving liability in tort, whether strict or otherwise), actions,
suits, judgments, costs, interest, expenses and disbursements, whether or not
any of the foregoing shall be founded or unfounded, contingent or otherwise
(including, without limitation, legal fees and expenses and costs of
investigation) of any kind and nature whatsoever without any limitation as to
amount.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference herein to a section of the Code shall be deemed to
include the United States Treasury Regulations adopted under the Code, as the
same may be in effect from time to time, unless the context clearly requires
otherwise.
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"Counsel" shall mean an attorney at law selected by the Borrower (who
may be counsel to either or both of the Issuer and the Borrower) and acceptable
to the Trustee or, if not selected by the Borrower within a reasonable time
following any request therefor, by the Issuer and acceptable to the Trustee.
"County" shall mean Maricopa, Arizona.
"Credit Facility" shall mean, collectively, a Letter of Credit, if any,
and any extensions thereof, and, upon the issuance and delivery of any Alternate
Credit Support in accordance with Section 6.08 hereof, "Credit Facility" shall
mean such Alternate Credit Support.
"Environmental Law" shall mean any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health or safety or to the release or threatened
release of any materials into the environment, including, without limitation,
the Clean Air Act, as amended, the Clean Water Act of 1977, as amended, the
comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Hazardous Materials Transportation Act, as amended, the Toxic
Substance Control Act, as amended, and the Resource Conservation and Recovery
Act of 1976, as amended.
"Facilities" or "Project" shall mean the pollution control systems and
facilities presently existing, under construction and to be constructed at the
Plant, which are described in Exhibit A hereto, as from time to time revised,
changed, amended or modified and related improvements and any substitutions
therefor.
"Hazardous Materials" shall mean all materials that are, or become,
subject to any Environmental Law, including, without limitation, materials
listed in 49 I.E. (S)172.101, materials defined as hazardous pursuant to Section
101(14) of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, flammable, explosive or radioactive materials,
hazardous or toxic wastes or substances, petroleum or petroleum distillates,
PCB's or asbestos or urea formaldehyde containing materials.
"Issuance Expenses" shall mean any and all expenses incurred in
connection with the issuance of the Bonds including, but not limited to, any (a)
underwriters' compensation; (b) counsel fees; (c) financing advisor fees; (d)
rating agency fees; (e) trustee fees; (f) paying agent and certifying and
authenticating agent fees; (g) accounting fees; (h) printing costs; (i) costs
incurred in connection with the required public approval process; (j) costs of
engineering and feasibility studies necessary to the issuance of the Bonds (as
opposed to such studies relating to completion of the Project); and (k) the
issuance fee charged by, and expenses and disbursements of, the Issuer.
Notwithstanding anything to the contrary herein, "Issuance Expenses" shall not
include any bond insurance premiums and certain letter of credit fees that would
be treated as interest expenses under the arbitrage restrictions of the Code.
"Issuer" shall mean Maricopa County, Arizona Pollution Control
Corporation, an Arizona nonprofit corporation designated as a political
subdivision existing under the laws of the State of Arizona, incorporated for
and with the approval of the County, pursuant to the provisions of the
Constitution of the State of Arizona and the Act, and its successors and
assigns.
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"Letter of Credit" shall mean an irrevocable, direct-pay letter of
credit, if any, issued by the Bank and delivered to the Trustee in accordance
with Section 6.08 hereof and any extension thereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "Moody's"
shall be deemed to refer to any other nationally-recognized securities
rating-agency designated by the Borrower, with the approval of the Remarketing
Agent and the Bank, by notice to the Trustee, the Tender Agent and the Issuer.
"Outstanding", when used in reference to the Bonds, shall mean, as at
any particular date, the aggregate of all Bonds authenticated and delivered
under the Indenture except;
(i) those cancelled at or prior to such date or delivered to
or held by the Trustee at or prior to such date for cancellation;
(ii) those deemed to have been paid in accordance with Article
IX of the Indenture;
(iii) those in lieu of, or in exchange, replacement or
substitution for which, other Bonds shall have been authenticated and
delivered pursuant to the Indenture unless proof satisfactory to the
Trustee and the Borrower is presented that such Bond is held by a bona
fide holder in due course; and
(iv) Undelivered Bonds.
"Owner" shall mean the person or entity in whose name any Bond is
registered upon the registration books maintained pursuant to Section 2.04 of
the Indenture.
"Permitted Encumbrances" shall mean and include (a) liens for taxes,
assessments and other governmental charges not delinquent or which can be paid
without penalty; (b) unfiled, inchoate mechanics' and materialmen's liens for
construction work in progress; (c) workmen's, repairmen's, warehousemen's and
carriers' liens and other similar liens, if any, arising in the ordinary course
of business; (d) all the following, if they do not individually or in the
aggregate materially impair the use of the Facilities or materially detract from
the value thereof to the Borrower, viz. any easements, restrictions, mineral,
oil, gas and mining rights and reservations, zoning laws and defects in title or
other encumbrances to which the Facilities may be subject because of the
installation thereof at the Plant; (e) any lien for the satisfaction and
discharge of which a sum of money or surety bond deemed adequate by the Trustee
is on deposit with the Trustee; (f) the rights of the Issuer under this
Agreement or any other sale agreement or lease agreement between the Issuer and
the Borrower relating to the issuance of bonds under the Act; and (g) the lien
of the Borrower Indentures and the permitted encumbrances and other prior liens
referred to therein.
"Plant" shall mean the Palo Verde Nuclear Generating Station in
Maricopa County, Arizona, at which the Project is located.
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"Prior Bonds" shall mean the Maricopa County, Arizona Pollution Control
Corporation Pollution Control Refunding Revenue Bonds, 1984 Series E (El Paso
Electric Company, Palo Verde Project).
"Reimbursement Agreement" shall mean (i) any Reimbursement Agreement,
made by the Borrower in favor of the Bank, relating to payments for moneys drawn
under the Letter of Credit, if any, and any amendments, modifications and
supplements thereto, and (ii) from and after the issuance of an Alternate Credit
Support, any letter of credit reimbursement agreement or other arrangement
between the Borrower and the issuer of any Alternate Credit Support, and any
amendments, modifications and supplements thereto.
"Remarketing Agent" shall mean any remarketing agent appointed in
accordance with Section 14.01(a) of the Indenture.
"Repayment Installment" shall mean any amount that the Borrower is
required to pay to the Trustee pursuant to Section 5.02 hereof as a repayment of
the loan made by the Issuer under this Agreement.
"Representation and Indemnity Agreement" shall mean the Representation
and Indemnity Agreement dated as of July 23, 2002 among the Issuer, the Borrower
and Xxxxxxx Xxxxx Xxxxxx Inc.
"S&P" shall mean Standard & Poor's Ratings Group (a Division of
XxXxxx-Xxxx Inc.), a corporation organized and existing under the laws of the
State of New York, its successors and their assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
nationally-recognized securities rating agency designated by the Borrower, with
the approval of the Remarketing Agent and the Bank, by notice to the Trustee,
the Tender Agent and the Issuer.
"State" shall mean the State of Arizona.
"Tax Exempt" shall mean, with respect to interest on any obligations of
a state or local government, including the Bonds, that such interest is excluded
from the gross income of the holders thereof (other than any holder who is a
"substantial user" of facilities financed with such obligations or a "related
person" within the meaning of Section 147(a) of the Code) for federal income tax
purposes, whether or not such interest is includable as an item of tax
preference or otherwise includable directly or indirectly for purposes of
calculating other tax liabilities, including any alternative minimum tax or
environmental tax under the Code.
"Tender Agent" shall mean any tender agent appointed in accordance with
Section 14.01(b) of the Indenture.
"Trustee" shall mean JPMorgan Chase Bank, as trustee under the
Indenture, and its successor or successors in accordance with the Indenture.
"Principal Office" of the Trustee shall mean the principal office of the Trustee
in Texas at which at any particular time its corporate trust business shall be
administered, which office at the effective date of the Indenture is 000 Xxxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Institutional Trust Services; except
that with respect to the presentation of Bonds for payment or for registration
of transfer, exchange or
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tender, such term shall mean the office or agency of the Trustee at 0000 Xxxxx
Xxxxxx, 0/xx/ Xxxxx, Xxxxxx, Xxxxx 00000 Attention: Registered Bond Events.
Section 1.02 Interpretation. Unless the context indicates otherwise,
words importing the singular number include the plural number, and vice versa:
the terms "hereof", "hereby", "herein", "hereto", "hereunder" and similar terms
refer to this Agreement: and the term "hereafter" means after, and the term
"heretofore" means before, the date of delivery of the Bonds. Words of any
gender include the correlative words of the other genders, unless the sense
indicates otherwise.
Section 1.03 Captions and Headings. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties of the Issuer. The Issuer
makes the following representations and warranties as the basis for its
undertakings herein contained:
(a) The Issuer is an Arizona nonprofit corporation designated as
a political subdivision under the laws of the State, incorporated pursuant to
the Act for and with the approval of the County, created and existing under the
Constitution and laws of the State;
(b) The Issuer has the power to enter into the transactions
contemplated by this Agreement and the Indenture and to carry out its
obligations hereunder and thereunder;
(c) The Issuer has the power to enter into this Agreement and by
proper corporate action has duly authorized the execution and delivery hereof;
and
(d) The execution and delivery of this Agreement and the
Indenture and compliance with the provisions hereof and thereof will not
conflict with, or constitute on the part of the Issuer a breach of or a default
under, any existing law, court or administrative regulation, decree or order to
which the Issuer is subject or any agreement, ordinance, indenture, mortgage,
lease or other instrument by which the Issuer is or may be bound.
Section 2.02 Representations and Warranties of the Borrower. The
Borrower makes the following representations and warranties as the basis for the
undertakings on the part of the Issuer herein contained:
(a) (i) The Borrower is a corporation duly incorporated under
the laws of the State of Texas and is in good standing under the laws of the
State of Texas, has power to enter into this Agreement and to perform and
observe the agreements and covenants on its part contained herein, and by proper
corporate action has duly authorized the execution and delivery hereof, (ii) the
Borrower is duly qualified to hold property and transact business as a foreign
corporation and is in good standing under the laws of the State of Arizona,
(iii) all of the proceeds of the Bonds will be used to redeem and refund the
Prior Bonds, (iv) prior to the
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issuance of the Bonds, the Federal Energy Regulatory Commission will have
approved all matters relating to the Borrower's participation in the
transactions contemplated by this Agreement which require said approval, and no
other consent, approval, authorization or other order of any regulatory body or
administrative agency or other governmental body is legally required for the
Borrower's participation therein except such as have been or will have been
obtained prior to the issuance of the Bonds or such, if any, as may be required
under state securities or Blue Sky laws, and (v) the execution and delivery of
this Agreement by the Borrower do not, and consummation of the transactions
contemplated hereby and fulfillment of the terms hereof will not, result in a
breach of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Borrower is a party, or the Restated Articles of Incorporation or Bylaws of the
Borrower, or any order, rule or regulation applicable to the Borrower of any
court or of any Federal or state regulatory body or administrative agency or
other governmental body having jurisdiction over the Borrower or over any of its
properties, or any statute of any jurisdiction applicable to the Borrower other
than breaches or defaults that individually or in the aggregate are not expected
to have a material adverse effect on the Borrower.
(b) The Facilities meet applicable Federal, state and local
requirements for the control of pollution now in effect and are used for the
reduction, abatement and prevention of pollution;
(c) The Borrower does not presently expect that the description
of the Facilities contained in Exhibit A hereto will be revised;
(d) To the extent necessary to preserve the security for the
Bonds, the validity of the Bonds under the Act and the Tax-Exempt status of
interest on the Bonds, all material certificates, approvals, permits and
authorizations of agencies of applicable local governmental agencies, the State
and the federal government have been obtained with respect to the construction
of the Project and, pursuant to such certificates, approvals, permits and
authorizations, the Project has been constructed and is in operation.
(e) To the best knowledge of the Borrower, no member, officer or
other official of the Issuer has any interest whatsoever in the Borrower or in
the transactions contemplated by this Agreement.
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ARTICLE III
[RESERVED]
ARTICLE IV
[RESERVED]
ARTICLE V
LOAN TO BORROWER; REPAYMENT PROVISIONS
Section 5.01 Loan to Borrower. The Issuer covenants and agrees, upon
the terms and conditions in this Agreement, to make a loan to the Borrower for
the purpose of refunding the Prior Bonds. Pursuant to said covenant and
agreement, the Issuer will issue the Bonds upon the terms and conditions
contained in this Agreement and the Indenture. The Issuer and the Borrower agree
that the application of the proceeds of sale of the Bonds to refund and redeem
the Prior Bonds will be deemed to be and treated for all purposes as a loan to
the Borrower of an amount equal to the aggregate principal amount of the Bonds.
The Borrower covenants and agrees to pay to the trustee for the Prior Bonds an
amount which, when added to the amounts transferred to such trustee pursuant to
Section 3.02 of the Indenture, will be sufficient to pay, on or before August 1,
2002, the redemption price of the Prior Bonds and all other amounts due under
the indenture pursuant to which such Prior Bonds were issued all in accordance
with the terms of such indenture.
Section 5.02 Amounts and Dates for Payment.
(a) With respect to the Bonds, the Borrower covenants and agrees
to pay to the Trustee as a Repayment Installment on or before each date provided
in the Indenture, an amount equal to the aggregate principal, premium, if any,
and interest due on the Bonds, whether at maturity or by reason of redemption,
or otherwise. The Borrower shall, and hereby agrees to, pay the Repayment
Installment by delivery or causing delivery of such further installments, in
immediately available funds, necessary on the dates and in the amounts and in
the manner in the Indenture as may be necessary to enable the Issuer to cause
payment to be made to the Trustee of principal of and premium, if any, and
interest on the Bonds, whether at maturity, upon redemption, or otherwise,
provided that any amount credited under the Indenture against any cash payment
required to be made by the Issuer thereunder shall be credited against the
corresponding cash payment required to be made by the Borrower hereunder
(b) The Borrower shall, and hereby agrees to, pay in addition to
the Repayment Installment an amount equal to the aggregate of all other payments
to be made out of the Bond Fund, payment thereof to be made not later than the
principal or interest payment date next following any such payment out of the
Bond Fund but in any event in time to prevent any failure to pay when due the
principal of, premium, if any, and interest on any of the Bonds.
(c) In the event the Borrower shall fail to make any of the
payments required in this Section 5.02, the item or installment so in default
shall continue as an obligation of the
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Borrower until the amount in default shall have been fully paid. Draws by the
Trustee under the Credit Facility to pay the principal of, premium, if any, or
interest on the Bonds shall be deemed to satisfy the Borrower's obligation to
make purchase price payments to the extent of such draws.
(d) The obligation of the Borrower to make the payments described in
subsection (a) of this Section may be accelerated or prepaid in accordance with
the provisions of this Agreement, notwithstanding the provisions of this
Section.
Section 5.03 Payments by Borrower to be Assigned to the Trustee;
Obligation for Payments Absolute.
It is understood and agreed that all payments under Section 5.02 of
this Agreement are, by the Indenture, to be pledged by the Issuer to the
Trustee, and that all rights and interest of the Issuer under this Agreement,
except for the Issuer's rights under Sections 5.04, 5.08 and 8.05 of this
Agreement and any rights of the Issuer to receive notices, certificates,
requests, requisitions, directions and other communications hereunder, are to be
pledged and assigned to the Trustee. The Borrower assents to such pledge and
assignment and agrees that the obligation of the Borrower to make the payments
under Section 5.02 hereof shall be absolute, irrevocable and unconditional and
shall not be subject to any defense (other than payment) or any right of
set-off, counterclaim or recoupment arising out of any breach under this
Agreement, the Reimbursement Agreement, the Indenture, the Credit Facility or
otherwise by the Issuer, the Trustee, the Tender Agent, the Remarketing Agent,
the Bank or any other party, or out of any obligation or liability at any time
owing to the Borrower by the Issuer, the Trustee, the Tender Agent, the
Remarketing Agent, the Bank or any other party. The Issuer directs the Borrower,
and the Borrower agrees, to pay to the Trustee at its Corporate Trust Office all
payments pursuant to Section 5.02 of this Agreement.
Section 5.04 Payment of Expenses. The Borrower agrees to pay all
compensation and reasonable fees and expenses of, and to reimburse for the
expenses and advances incurred by each of the Trustee, the Registrar, the
Remarketing Agent, the Paying Agent and the Tender Agent under the Indenture. So
long as any Bonds are Outstanding, the Borrower will pay to the Issuer
semiannually, on a date to be agreed upon, or within 30 days of receipt of a
statement therefor submitted to the Borrower pursuant to Section 5.08 hereof,
the amount of any other Administration Expenses not theretofore provided for
which have accrued and become payable.
Section 5.05 Issuer Access to Facilities. The Borrower agrees that the
Issuer shall have the right, upon appropriate prior notice to the Borrower, to
have reasonable access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same.
Section 5.06 Maintenance of Facilities. So long as any Bonds are
Outstanding, the Borrower will maintain, preserve and keep the Facilities or to
cause such Facilities to be maintained, preserved and kept in good repair,
working order or condition and from time to time to make or cause to be made all
necessary and proper repairs, replacements and renewals; provided, however, that
the Borrower will have no obligation to maintain, preserve, keep, repair,
replace or renew any item or portion of such Facilities (a) the maintenance,
preservation,
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keeping, repair, replacement or renewal of which becomes uneconomic to the
Borrower because of damage or destruction by a cause not within the control of
the Borrower, or obsolescence (including economic obsolescence) or change in
governmental standards and regulations, or the termination by the Borrower of
the operation of the generating facilities to which the portion of such
Facilities is an adjunct, and (b) with respect to which the Borrower has
furnished to the Issuer and the Trustee a certificate executed by an Authorized
Borrower Representative that the maintenance, preservation, keeping, repair,
replacement or renewal of such portion of such Facilities is being discontinued
for one of the foregoing reasons, which shall be stated therein.
The Borrower shall have the privilege at its own expense of remodeling such
Facilities or making substitutions, modifications and improvements to such
Facilities from time to time as it, 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 such
Facilities.
Section 5.07 Insurance. So long as any Bonds are Outstanding and the
Borrower, itself or through its agents, operates the Facilities, the Borrower
shall maintain or cause to be maintained, through a program of self-insurance or
otherwise, such fire, casualty, public liability and other insurance with
respect to the Facilities owned or leased by the Borrower as is customarily
carried by electric utility companies with respect to similar facilities.
Section 5.08 Indemnification of Issuer; Statements for Services. The
Borrower agrees, whether or not any of the transactions contemplated hereby
shall be consummated and whether or not this Agreement, the Indenture, the
Credit Facility or any other document relating to the Bonds shall have expired
or been terminated to release, to assume liability for, and agrees to indemnify
and hold harmless, on an after-tax basis, the Issuer, the Trustee, the Paying
Agent and the Registrar and each of the officers, officials, directors,
employees, staff members, agents, shareholders and partners of each of the
Trustee, the Paying Agent and the Registrar (each an "Indemnified Party" and
collectively, the "Indemnified Parties") from and against, any and all Claims
that are imposed on, incurred by or asserted against any Indemnified Party
(whether or not because of an act or omission by such Indemnified Party and
whether or not such Indemnified Party shall also be indemnified by another
person), in whole or in part, as a result of, caused by, arising out of or in
any way relating to:
(a) any injury to or death of any person or damage to property in
or upon the Facilities or growing out of or connected with the use, non-use,
condition or occupancy of the Facilities or any part thereof;
(b) violation of any agreement or condition of this Agreement;
(c) violation by the Borrower of any contract, agreement or
restriction relating to the Facilities;
(d) violation of any law, ordinance or regulation affecting the
Facilities or a part thereof or the ownership, occupancy or use thereof;
(e) any statement or information contained in the Indenture, this
Agreement, any official statement, any certificate or any other documents
relating to the Bonds and the
11
proceedings relating to their issuance and sale, furnished by the Borrower to
the Issuer which is misleading, untrue or incorrect in any material respect or
use thereof;
(f) any investigation, litigation, proceeding, cleanup, audit,
violation or other matter, related to, of, or involving the application or
compliance with any Environmental Law, the protection of the environment or the
release by the Borrower of any Hazardous Material;
(g) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any property owned
or operated by the Borrower of any Hazardous Material, whether caused by, or
within the control of, the Borrower; and
(h) the administration of the trust created by the Indenture, the
exercise of any rights under the Indenture and the performance of any remedial
measures permitted by the Indenture, except for (i) a Claim against an
Indemnified Party (other than the Issuer) that arises by reason of such
Indemnified Party's gross negligence or willful misconduct or, in the case of
clause (h) above, negligence or willful misconduct; provided, however, if and to
the extent the foregoing agreement to indemnify is unenforceable for any reason,
the Borrower agrees to make the maximum contribution to the payment and
satisfaction of each of the agreed indemnities that is permissible under
applicable law.
In addition, the Borrower will indemnify and hold the Issuer, the Trustee,
the Paying Agent, the Registrar, the Trustee's, the Paying Agent's and the
Registrar's officers, directors, employees and agents free and harmless from any
loss, claim, damage, tax, penalty, liability (including but not limited to
liability for any patent infringement), disbursement, cause of action, suit,
demand, judgment, litigation expenses, attorneys' fees and expenses or court
costs arising out of, or in any way relating to (a) any errors or omissions of
any nature whatsoever contained in any legal proceedings or other official
representation or inducement made by the Issuer pertaining to the Bonds, (b) any
fraud or misrepresentations or omissions contained in the proceedings of the
Issuer relating to the issuance of the Bonds or pertaining to the financial
condition of the Borrower which, if known to a purchaser or holder of the Bonds,
might be considered a material factor in a decision whether or not to buy the
Bonds, and (c) the execution or performance of this Agreement, the issuance or
sale of the Bonds and actions taken under the Indenture or any other cause
whatsoever pertaining to the Facilities and the approval under the Act.
Promptly after receipt by an Indemnified Party under this Section 5.08 of
written notice of the existence of a claim in respect of which indemnity
hereunder may be sought or of the commencement of any action against the
Indemnified Party in respect of which indemnity hereunder may be sought, the
Indemnified Party shall notify the Borrower in writing of the existence of such
Claim or commencement of such action. In case any such action shall be brought
against an Indemnified Party under this Section 5.08, the Indemnified Party
shall notify the Borrower of the commencement thereof and the Borrower shall be
entitled to participate in and, to the extent that it may wish, to assume the
defense thereof, with counsel satisfactory to the Indemnified Party; provided,
however, that if the Indemnified Party shall have been advised in an opinion of
counsel to the Indemnified Party that there may be legal defenses available to
it
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which are adverse to or in conflict with those available to the Borrower or
other Indemnified Parties, which in the opinion of counsel to the Indemnified
Party, should be handled by separate counsel, the Borrower shall not have the
right to assume the defense of such action on behalf of the Indemnified Party,
but shall be responsible for the reasonable fees and expenses of the Indemnified
Party in conducting its defense; and provided, further, that if the Borrower
shall not have assumed the defense of such action, and shall not have employed
counsel therefor satisfactory to the Indemnified Party within a reasonable time
after notice of commencement of such action, such reasonable fees and expenses
incurred by the Indemnified Party in conducting its own defense shall be borne
by the Borrower.
The Borrower's responsibility for the reasonable fees and expenses of any
Indemnified Party in conducting its defense as provided in the preceding
paragraph shall commence from the time the Claim is known of by the Borrower,
and such responsibility shall exist and continue regardless of the merits of the
Claim.
In addition, the Borrower agrees that if it initiates any action, suit or
other proceeding with respect to any claim, demand or request for relief,
whether judicial or administrative, in which the Issuer, the Trustee, the
Registrar or the Paying Agent is named or joined as a party, the Borrower will
pay and reimburse to such party the full amount of all reasonable fees and
expenses incurred by such party with respect to such party's defense of or
participation in such action, suit or other proceeding.
The Issuer may submit to the Borrower periodic statements, not more
frequently than monthly, for the reasonable value of services of any Issuer
employees utilized, and for the full amount of any Issuer expenses incurred by
the Issuer in connection with the performance or attainment by the Issuer of its
obligations and rights under the Indenture, the Bonds or this Agreement, and the
Borrower shall make payment to the Issuer of the full amount of each such
statement within 30 days after the Borrower receives such statement; provided
that the Borrower within such 30-day period may in writing and in good faith
specifically protest all or any portion of the amounts included in such
statement and in such event the Borrower shall not be obligated to make payment
to the Issuer of the amount which has been protested in such manner until ten
days after such protest shall have been resolved either by agreement between the
Issuer and the Borrower or by an appropriate tribunal.
Under this Section 5.08, the Borrower shall also be deemed to release,
indemnify and agree to hold harmless each employee, official or officer of the
Issuer to the same extent as the Issuer.
Section 5.09 Notices of Damage. After the occurrence of any material damage
or loss to the Facilities, if any Bonds are then Outstanding, the Borrower shall
notify the Issuer and the Trustee as to the nature and extent of such damage or
loss and whether it is practicable and desirable to rebuild, repair, or restore
such damage or loss.
Section 5.10 No Warranty by the Issuer.The Issuer makes no warranty, either
express or implied, as to the Project or that it will be suitable for the
purposes of the Borrower or needs of the Borrower.
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Section 5.11 Liens. The Borrower hereby agrees not to create any lien upon
the Bond Fund or upon the Receipts and Revenues (as defined in the Indenture)
other than the lien created in the Indenture. The Borrower hereby agrees that it
shall not have any interest in the Bond Fund or the moneys or Investment
Securities (as defined in the Indenture) therein.
Section 5.12 Payments of Taxes and Assessments; No Liens or Charges. The
Borrower will: (a) pay, or make provision for payment of, all lawful taxes and
assessments, including income, profits, property or excise taxes, if any, or
other municipal or governmental charges, levied or assessed by any Federal,
state or municipal government or political body, upon the Project or upon any
part of either or upon any installment payments hereunder when the same shall
become due and (b) pay or cause to be discharged or make adequate provision to
satisfy and discharge, within sixty (60) days after the same shall accrue, any
lien or charge upon any installment payment hereunder and all lawful claims or
demands for labor, materials, supplies or other charges which, if unpaid, might
be or become a lien upon any installment payment hereunder, except Permitted
Encumbrances; provided with respect to both clause (a) and clause (b) of this
Section 5.12 that the Borrower may in good faith contest any such tax,
assessment, lien, charge, claim or demand in appropriate legal proceedings if
the Borrower shall notify the Issuer and the Trustee of its intention so to do
at or prior to the time of initiating such contest, and in such event may permit
the items so contested to remain unpaid, undischarged and unsatisfied during the
period of such contest and any appeal therefrom, unless the Issuer or the
Trustee shall notify the Borrower in writing that, in the opinion of Counsel, by
nonpayment of any such items the lien of the Indenture as to the payments of the
Repayment Installments will be materially endangered, in which event the
Borrower shall promptly pay and cause to be satisfied and discharged all such
unpaid items. The Issuer will cooperate fully with the Borrower in any such
contest.
Section 5.13 Additional Payments by the Borrower. The Borrower will pay, or
cause be paid, in addition to the payments provided for in Section 5.02(a)
hereof, all of the expenses of operation of the portions of the Project
including, without limitation, the cost of all necessary and proper repairs,
replacements and renewals made pursuant to Section 5.06 hereof and premiums for
insurance pursuant to Section 5.07 hereof.
ARTICLE VI
SPECIAL COVENANTS; CREDIT FACILITY
Section 6.01 [RESERVED].
Section 6.02 Maintenance of Existence. The Borrower covenants that it will
maintain its corporate existence, will not dissolve or otherwise dispose of all
or substantially all its assets and will not consolidate with or merge into
another corporation; provided, however, that the Borrower may consolidate with
or merge with or into, or sell or otherwise transfer all or substantially all of
its assets (and may thereafter dissolve), to another corporation, incorporated
under the laws of the United States, one of the states thereof or the District
of Columbia, provided, in the event the Borrower is not the surviving, resulting
or transferee corporation, as the case may be, such corporation prior to such
merger, consolidation, sale or transfer assumes,
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by delivery to the Trustee of an instrument in writing satisfactory in form and
substance to the Trustee, all the obligations of the Borrower herein.
If consolidation, merger or sale or other transfer is made as permitted
by this Section, the provisions of this Section shall continue in full force and
effect and no further consolidation, merger or sale or other transfer shall be
made except in compliance with the provisions of this Section. The Borrower
shall notify the Trustee of its affiliates from time to time and of the filing
of a petition in bankruptcy by or on behalf of any of itself or its affiliates
from time to time.
Section 6.03 Agreement as to Ownership and Use of the Project. The
Issuer and the Borrower agree that title to the Project shall be in and remain
in the Borrower, and that the Project shall be the sole property of the Borrower
in which the Issuer shall have no interest. Notwithstanding the provisions of
this Section 6.03, the Borrower in its sole discretion and business judgment may
choose to cease operation of the Project or transfer the Project to another
entity which may cease such operation, and in such circumstances the covenants
contained in this Section 6.03 shall no longer apply.
Section 6.04 Cooperation in Applications for Permits and Licenses. In
the event it may be necessary for the proper performance of this Agreement on
the part of the Issuer or the Borrower 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 or on behalf of the Borrower or the Issuer, the
Borrower and the Issuer each agree, upon the request of either, to execute such
application or applications.
Section 6.05 Recordation and Other Instruments. The Borrower shall
cause such security agreements, financing statements and all supplements thereto
and other instruments as may be required from time to time to be kept, to be
recorded and to be filed in such manner and in such places as may be required by
law in order to fully preserve, protect and perfect the security of the holders
of the Bonds and the rights of the Trustee and to perfect the security interest
created by the Indenture.
Section 6.06 Issuer's Access to Facilities. The Borrower agrees that
the Issuer and the Trustee shall have the right, upon appropriate prior notice
to the Borrower, to have reasonable access to the Facilities owned or leased by
the Borrower during normal business hours for the purpose of making examinations
and inspections of the same; provided, however, that the Borrower reserves the
right to restrict access to any of its generating facilities in accordance with
reasonably adopted procedures relating to safety and security.
Section 6.07 Tax Covenants. The Borrower covenants that it will not
take any action or fail to take any action reasonably within its control which
would, under the Code, cause the interest payable on the Bonds to be includable
in gross income of the holders thereof for Federal income tax purposes (other
than a "substantial user" of the Facilities or a "related person" as those terms
are used in Section 147(a) of the Code).
The Borrower covenants that it will pay to the United States of
America, on behalf of the Issuer, at or before the times required by or under
Section 148(f) of the Code, the amounts required to cause to be met with respect
to the Bonds the rebate requirement of said Section and
15
such rules and regulations applicable to the Bonds. The Borrower covenants that
in directing the investment of the gross proceeds of the Bonds it will comply
with the applicable requirements of Section 148 of the Code. The Borrower
covenants that it will maintain on behalf of the Issuer such records and file
such reports, and file copies thereof with the Issuer and, if requested by the
Trustee, with the Trustee, as may be necessary to be maintained to demonstrate
compliance with this paragraph.
Section 6.08 Credit Facility.
(a) In order to provide credit support for the payment of all or a
portion of the obligations of the Borrower under Section 5.02 or 10.01(a)
hereof, or both, the Borrower may, but shall not be obligated to, provide a
Credit Facility at any time, and from time to time. Subject to the provisions of
subsections (c) and (d) of this Section 6.08, the Borrower may at any time, and
from time to time, terminate, or cause or allow to be terminated or to expire
any such Credit Facility. The Borrower hereby authorizes and directs the Trustee
to draw moneys under the Credit Facility, if any, in accordance with the terms
thereof and of the Indenture.
(b) Any Credit Facility, at the option of the Borrower, may provide
that drawings may be made thereunder to pay to the Trustee, in accordance with
the terms thereof, (i) an amount equal to (A) the principal of the Bonds when
due upon maturity, redemption or acceleration and (B) the portion of the
purchase price of Bonds purchased pursuant to Section 14.03(b) of the Indenture
equal to the principal amount thereof; (ii) an amount equal to a specified
number of days' interest, computed at the Maximum Interest Rate (as defined in
the Indenture), on the Bonds to pay (A) accrued and unpaid interest on the Bonds
and (B) the portion of the purchase price of Bonds purchased pursuant to Section
14.03(b) of the Indenture equal to the accrued interest thereon; (iii) any part
of the portion of the purchase price of Bonds purchased pursuant to Section
14.03(b) of the Indenture corresponding to redemption premium on the Bonds; and,
(iv) an amount to pay redemption premium, if any, on the Bonds which may be
payable upon the redemption thereof. The Credit Facility shall be reduced to the
extent of any drawings thereunder and reinstated in accordance with the terms
thereof.
The Borrower may, at its election, provide for one or more extensions
of any Credit Facility in accordance with the terms of the Reimbursement
Agreement in respect thereof.
(c) On or prior to the 35th day preceding the mandatory purchase
date occurring pursuant to Section 4.08(c) of the Indenture, the Borrower shall
deliver to the Trustee, the Tender Agent, the Remarketing Agent and the Bank:
(i) a notice which (A) states the effective date of
expiration or termination of the existing Credit Facility, (B)
describes any substitute Credit Facility which may be provided in lieu
thereof, and (C) directs the Trustee, after taking such actions
thereunder as are required to be taken to provide moneys due under the
Indenture in respect of the Bonds or the purchase thereof, to surrender
the Credit Facility to expire or to be terminated to the obligor
thereon on the effective date of the substitute Credit Facility to be
provided in lieu of the Credit Facility to expire or to be terminated
or, if no such Credit Facility is to be so provided, on the effective
date of such expiration or termination; and
16
(ii) written evidence from Xxxxx'x, if the Bonds are then rated
by Xxxxx'x, and S&P, if the Bonds are then rated by S&P, of the action
that such rating agency will take with respect to the rating assigned
to the Bonds on such expiration or termination and delivery of a new
Credit Facility, if any.
(d) On or prior to the 35th day preceding the effective date of
expiration or termination of any Credit Facility and the substitution of another
Credit Facility that does not result in a downgrading or withdrawal of any
rating assigned to the Bonds, the Borrower shall deliver to the Trustee, the
Tender Agent, the Remarketing Agent and the Bank:
(i) a notice which (A) states the effective date of expiration
or termination of the existing Credit Facility, (B) describes the
Credit Facility which is to be provided in lieu thereof, and (C)
directs the Trustee to surrender the Credit Facility to expire or to be
terminated to the obligor thereon on the effective date of the
substitute Credit Facility to be provided in lieu of the Credit
Facility to expire or to be terminated; and
(ii) written evidence from Xxxxx'x, if the Bonds are then rated
by Xxxxx'x, and S&P, if the Bonds are then rated by S&P, that such
expiration or termination and delivery of a new Credit Facility will
not result in a downgrading or withdrawal of the rating assigned to the
Bonds by such rating agency.
(e) In connection with any termination of a Credit Facility and/or
the provision of a new Credit Facility, if any, the Borrower also shall furnish
to the Trustee a Favorable Opinion of Bond Counsel (as defined in the Indenture)
and such other opinions of counsel as to such other matters as the Issuer or the
Trustee may request.
Section 6.09 Annual Statement. The Borrower agrees during the term of
this Agreement to have an annual audit made by its regular independent certified
public accountants and to furnish the Trustee (within 30 days after receipt by
the Borrower) with a balance sheet and statement of income and surplus showing
the financial condition of the Borrower and its consolidated subsidiaries, if
any, at the close of each fiscal year and the results of operations of the
Borrower and its consolidated subsidiaries, if any, for each fiscal year,
accompanied by a report of said accountants that such statements have been
prepared in accordance with generally accepted accounting principles. The
Borrower's obligations under this Section 6.09 may be satisfied by delivering a
copy of the Borrower's Annual Report to the Trustee at the same time that it is
mailed to stockholders. The Trustee shall have no duty or obligation with
respect to such financial statements or reports except to make them available to
any requesting Bondholders.
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ARTICLE VII
[RESERVED]
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default. Each of the following events shall be
and is referred to in this Agreement as an "Event of Default":
(a) failure by the Borrower to pay or cause to be paid any
amounts required to be paid under Section 5.02 or Section 10.01(a) hereof when
due which failure shall have resulted in an "Event of Default" under clause (i),
(ii) or (iii) of Section 10.01(a) of the Indenture;
(b) a failure by the Borrower (i) to pay when due any other
payment required to be made under this Agreement or (ii) to observe and perform
any other covenant, condition or agreement on its part to be observed or
performed, other than as referred to in this Section 8.01, which failure
continues for a period of 30 days after written notice, specifying such failure
and requesting that it be remedied, is given to the Borrower by the Issuer or
the Trustee, which may give such notice in its discretion and shall give such
notice at the written request of the holders of not less than a majority in
principal amount of the Bonds then Outstanding (other than Bonds held by, or on
behalf of the Borrower), unless the Issuer and the Trustee or the Issuer, the
Trustee and the holders of a principal amount of Bonds not less than the
principal amount of Bonds the holders of which requested such notice, as the
case may be, shall agree to an extension of such period prior to its expiration;
or
(c) the dissolution or liquidation of the Borrower, or the
filing by the Borrower of a voluntary petition in bankruptcy, or failure by the
Borrower promptly to forestall or lift any execution, garnishment or attachment
of such consequence as will impair its ability to continue its business or to
make any payments under this Agreement, 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 Borrower for the
benefit of its creditors, or the entry by the Borrower into an agreement of
composition with its creditors (the term "dissolution or liquidation of the
Borrower", as used in this clause, shall not be construed to include the
cessation of the existence of the Borrower resulting from a dissolution or
liquidation of the Borrower following a transfer of all or substantially all its
assets as an entirety, under the conditions permitting such actions contained in
Section 6.02 hereof); or
(d) the occurrence and continuance of an Event of Default under
the Indenture.
The Issuer (or the Borrower, in the case of clause (c)) shall promptly
notify the Trustee and the Bank of the occurrence of any Event of Default under
this Section 8.01.
Section 8.02 Force Majeure. The provisions of Section 8.01(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
18
or of the State of Arizona or any department, agency, political subdivision,
court or official of any of them, or any civil or military authority;
insurrections; riots; epidemics; landslides; lightning; earthquakes; volcanoes;
fires; hurricanes; tornados; floods; washouts; droughts; arrests; restraint of
government and civil disturbances; explosions; breakage or accident to
machinery; or entire failure of utilities; or any cause or event not reasonably
under the control of the Borrower, the Borrower 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 Sections 5.02, 5.04, 5.08, 5.12, 6.02, 8.05 and
10.01(a) hereof, the Borrower 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 Borrower shall use
reasonable efforts to remedy 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 Borrower,
and the Borrower shall not be required to make settlement of strikes, lockouts
and other disturbances by acceding to the demands of the opposing party or
parties when such course is, in the judgment of the Borrower, unfavorable to the
Borrower.
Section 8.03 Remedies.
(a) Upon the occurrence and continuance of any Event of Default
described in Section 8.01 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 unpaid balance of the loan payable under Section 5.02 hereof 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, or cause to be taken, any action at law or in
equity to collect any payments then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Borrower hereunder.
(d) Any amounts collected from the Borrower pursuant to this
Section 8.03 shall be applied in accordance with the Indenture.
Section 8.04 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 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 VIII, it shall
not be necessary to give any notice other than such notice as may be herein
expressly required.
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Section 8.05 Reimbursement of Attorneys' Fees. If the Borrower shall
default under any of the provisions hereof (i) and the Issuer or the Trustee
shall employ attorneys or incur other reasonable 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 Borrower contained herein, the
Borrower will on demand therefor reimburse the Issuer or the Trustee, as may be,
for the reasonable fees of such attorneys and such other reasonable expenses so
incurred, to the extent permitted by law, and (ii) the Borrower shall pay the
Trustee reasonable compensation for extraordinary services, including default
administration.
Section 8.06 Waiver of Breach. In the event any obligation created
hereby shall be breached by either of the parties 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
interests hereunder to the Trustee, the Issuer shall have no power to waive any
default hereunder by the Borrower in respect of such rights and interests
without the consent of the Trustee, and the Trustee may exercise any of the
rights of the Issuer hereunder.
ARTICLE IX
OPTIONS OF BORROWER TO PREPAY.
Section 9.01 Options of Borrower to Prepay Repayment Installments.
(a) The Borrower shall have, and is hereby granted, the option
to prepay the loan payable under Section 5.02 hereof in whole or in part by
causing the Bonds to be called for redemption pursuant to Section 4.01 of the
Indenture in which case all or a portion of the balance of the loan payable
under Section 5.02 hereof shall become due and payable on the redemption date
specified pursuant to Section 9.02 hereof in an amount sufficient to pay the
principal of any premium, if any, and interest on the Bonds so called for
redemption.
(b) The Borrower shall also have, and is hereby granted, the
option to prepay the amounts payable under Section 5.02 hereof in whole or in
part by causing Bonds to be deemed to have been paid pursuant to Section 9.01 of
the Indenture by depositing with the Trustee moneys or obligations, or a
combination thereof, as required by such Section 9.01 and by giving the
irrevocable instructions required by such Section 9.01.
Section 9.02 Exercise of Option.
(a) To exercise an option granted in Section 9.01 hereof, the
Borrower shall give written notice to the Trustee which shall designate therein
the principal amount of the Bonds to be caused to be redeemed, or to be deemed
to be paid in accordance with Section 9.01 of the Indenture and, in the event a
redemption of Bonds is to be effected, such notice shall be given to the Trustee
not less than five Business Days (as defined in the Indenture) prior to the day
on which the Trustee shall be required to give notice of any such redemption and
shall specify therein (i) the date or dates of redemption and (ii) the
applicable redemption provision of the Indenture. The exercise of an option
granted in Section 9.01 hereof shall be revocable by the
20
Borrower at any time before the receipt by the Trustee of the Repayment
Installments to be prepaid.
(b) Upon receipt of a notice furnished pursuant to this Section 9.02,
the Issuer shall cooperate fully with the Trustee to permit the Trustee to take
or cause to be taken all actions required of it under the Indenture to cause
Bonds to be paid or redeemed in accordance with such notice.
(c) In the event the Borrower exercises its rights to cause the Bonds
to be redeemed or deemed to have been paid as provided in Section 9.01 hereof,
it shall give the Trustee directions to draw moneys under the applicable Credit
Facility in accordance with the terms hereof and of the Indenture in the amounts
so specified by the Borrower in such direction or order to effect the redemption
of the Bonds entitled to the benefits of the Credit Facility or cause such Bonds
to be deemed to have been paid as provided in Section 9.01 of the Indenture.
Section 9.03 Mandatory Prepayment of Repayment Installments.
The Borrower shall prepay the necessary portion of the unpaid balance of
the Repayment Installments on such dates on which the Bonds are required to be
redeemed pursuant to Section 4.01(b) of the Indenture.
Section 9.04 Amount of Prepayment.
The Borrower agrees to and shall pay (or cause to be paid) directly to the
Trustee any amount permitted or required to be paid by it under this Article IX.
The Trustee shall use the moneys so paid to it by the Borrower to effect
redemption of the Bonds in accordance with Article IV of the Indenture.
Article X
PURCHASE AND REMARKETING OF BONDS
Section 10.01 Purchase of Bonds.
(a) In consideration of the issuance of the Bonds by the Issuer, but
for the benefit of the Owners of the Bonds, the Borrower does hereby covenant
and agree to cause the necessary arrangements to be made and to be thereafter
continued whereby, from time to time, the Bonds will be purchased from the
owners thereof under the circumstances provided in Section 4.08 of the
Indenture. In furtherance of the foregoing covenant of the Borrower, the Issuer,
at the direction of the Borrower, has set forth in Section 4.08 of the Indenture
the terms and conditions relating to such purchases and has set forth in Article
XIV of the Indenture the duties and responsibilities of the Tender Agent with
respect to the purchase of Bonds and of the Remarketing Agent with respect to
the remarketing of Bonds. At the direction of the Borrower, Xxxxxxx Xxxxx Xxxxxx
Inc. has been designated as the initial Remarketing Agent and as the initial
Tender Agent and the Borrower hereby authorizes and directs the Tender Agent and
the
21
Remarketing Agent to purchase, offer, sell and deliver Bonds in accordance with
the provisions of Section 4.08 and Article XIV of the Indenture.
Without limiting the generality of the foregoing covenant of the Borrower,
and in consideration of the Issuer's having set forth in the Indenture the
aforesaid provisions of Section 4.08 and Article XIV thereof, the Borrower
covenants, for the benefit of the Owners of the Bonds, to pay, or cause to be
paid, to the Tender Agent such amounts as shall be necessary to enable the
Tender Agent to pay the purchase price of Bonds, all as more particularly
described in Section 4.08 and Article XIV of the Indenture.
(b) The Issuer shall have no obligation or responsibility financial
or otherwise, with respect to the purchase or remarketing of Bonds or the making
or continuation of arrangements therefor, except that the Issuer shall generally
cooperate with the Borrower, the Trustee, the Tender Agent and the Remarketing
Agent as contemplated in Article XIV of the Indenture.
Section 10.02 Optional Purchase of Bonds. Subject to the limitations of the
Indenture, the Borrower, at any time and from time to time, may furnish moneys
to the Tender Agent accompanied by a notice directing that such moneys be
applied to the purchase of Bonds to be purchased pursuant to Section 4.08 and
Article XIV of the Indenture. Bonds so purchased shall be delivered to the
Borrower in accordance with Section 14.05(a) of the Indenture.
Section 10.03 Determination of Interest Rate Periods. The Borrower may
determine the duration and type of the Interest Rate Periods and certain other
provisions relating to Interest Rate Periods as, and to the extent, set forth in
Section 2.01 of the Indenture.
Article XI
MISCELLANEOUS
Section 11.01 Term of Agreement. This Agreement shall remain in full force
and effect from the date hereof until the right, title and interest of the
Trustee in and to the Trust Estate shall have ceased, terminated or become void
in accordance with Article IX of the Indenture and until all payments required
under this Agreement shall have been made.
Section 11.02 Notices. All notices, certificates, requests or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or telecopied or if mailed, when mailed by registered mail,
postage prepaid, addressed as follows:
If to the Issuer: Maricopa County, Arizona
Pollution Control Corporation
c/o Xxxxx Xxxxxxx & Xxxxxxxxxx
Xxx Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: President
22
If to the Borrower: El Paso Electric Company
000 Xxxxx Xxxxxxx
Xx Xxxx, Xxxxx 00000
Attention: Treasurer
If to the Trustee: JPMorgan Chase Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Institutional Trust Services
If to the Remarketing Agent: Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
If to the Tender Agent: Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
A copy of each notice, certificate, request or other communication given
hereunder to the Issuer, the Borrower, the Trustee, the Bank, the Tender Agent
or the Remarketing Agent shall also be given to the others. The Issuer, the
Borrower, the Trustee, the Bank, the Tender Agent and the Remarketing Agent may,
by notice given hereunder, designate further or different addresses to which
subsequent notices, certificates, requests or other communications shall be
sent. Such notice shall be given to all others listed above.
Section 11.03 Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Borrower and their
respective successors and assigns, and no other person, firm or corporation,
other than the Owners, the Trustee, the Registrar or the Paying Agent under the
Indenture, the Tender Agent, the Remarketing Agent and the Bank, shall have any
right, remedy or claim under or by reason of this Agreement; provided, however,
that the obligations of the Borrower under Section 5.08 hereof shall inure to
the benefit of the persons specified therein, and such obligations shall be
enforceable by such persons as a third-party beneficiary; and subject to the
limitation that any obligation of the Issuer created by or arising out of this
Agreement shall not be a general debt of the Issuer, but shall be payable solely
out of the revenues derived from this Agreement or the sale of the Bonds or
income earned on invested funds as provided herein and in the Indenture.
Section 11.04 Extent of Covenants of the Issuer; No Personal Liability. All
covenants, obligations and agreements of the Issuer contained in this Agreement
or the Indenture shall be effective to the extent authorized and permitted by
applicable law. No such covenant, obligation or agreement shall be deemed to be
a covenant, obligation or agreement of any official, officer,
23
agent, or employee of the Issuer in other than his official capacity, and
neither the members of the Issuer Council nor any official executing the Bonds
shall be liable personally on the Bonds or be subject to any personal liability
or accountability by reason of the issuance thereof or by reason of the
covenants, obligations or agreements of the Issuer contained in this Agreement
or in the Indenture.
Section 11.05 Confirmation of Request by the Borrower. The Borrower hereby
confirms that it has requested that the Issuer enter into the Indenture
including, without limitation, all of the terms and provisions relating to the
Bonds, the Trustee, Paying Agent, Registrar, Remarketing Agent and Tender Agent
and designating the parties named therein as Trustee, Paying Agent, Registrar,
Remarketing Agent and Tender Agent.
Section 11.06 Amendments. This Agreement may be amended only by written
agreement of the parties hereto with the consent of the Bank or the provider of
any other Credit Facility, for so long as the Credit Facility is in effect,
subject to the limitations set forth herein and in the Indenture.
Section 11.07 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original; but such counterparts shall together constitute but one and the same
Agreement.
Section 11.08 Severability. If any clause, provision or section of this
Agreement shall, for any reason, be held illegal or invalid, such illegality or
invalidity shall not affect any other provision of this Agreement, and this
Agreement shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein.
Section 11.09 Governing Law; Venue. This Agreement shall be construed in
accordance with and governed by the Constitution and laws of the State of
Arizona.
Section 11.10 Statutory Notice. In accordance with the terms thereof,
notice is hereby given of Title 38, Chapter 3, Section 38-511, Arizona Revised
Statutes, which provides, among other things, that the State, its political
subdivisions or any department or agency of either may, within three years after
its execution, cancel any contract, without penalty or further obligation, made
by said State, its political subdivisions, or any of the departments or agencies
of either if any person significantly involved in initiating, negotiating,
securing, drafting or creating the contract on behalf of said State, its
political subdivisions, or any of the departments or agencies of either is, at
any time while the contract or any extension of the contract is in effect, an
employee or agent of any other party to the contract in any capacity or a
consultant to any other party of the contract with respect to the subject matter
of the contract.
24
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed in
its name by its duly authorized officer, and the Borrower has caused this
Agreement to be executed in its name and its seal to be hereunto affixed and
attested by its duly authorized officer, all as of the date first above written.
MARICOPA COUNTY, ARIZONA POLLUTION
CONTROL CORPORATION
By: /s/ Xxxxxx X. Xxxx
------------------------------
President
EL PASO ELECTRIC COMPANY
By: /s/ Xxxxxxx Xxxx
------------------------------
Treasurer
[Seal]
Attest:
By ____________________________
Assistant Secretary
EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project consists of the following systems at the Plant and, in each
case, include related machinery, equipment and facilities:
Section 1.01 Condensate Demineralizer Resin Regeneration System. The
Condensate Demineralizer Resin Regeneration System for each Unit recycles spent
resin from the full flow condensate demineralizers, and is located in the Unit's
turbine building. This system recycles spent resin by chemical regeneration
using acid and caustic treatment. Spent resin is transferred from the condensate
demineralizers to the regeneration vessels where it is chemically regenerated
and then transferred to the resin mix and hold vessel prior to transfer back to
the demineralizer.
The resin regeneration system includes the following components and
equipment:
(a) One resin separation cation regeneration vessel that is a rubber-
lined, vertical-cylindrical tank, with internal baffles and distributors.
(b) One anion regeneration vessel that is a rubber-lined vertical-
cylindrical tank, with internal baffles and distributors.
(c) One resin mix and hold vessel that is a rubber-lined, vertical-
cylindrical tank, with internal baffle and distributor plate.
(d) One acid day-tank that is a vertical-cylindrical tank of 400-
gallon capacity, with a hinged cover, desiccant air breather and gauge glass.
(e) Two motor-driven, diaphragm type, acid pumps with adjustable
stroke.
(f) One caustic day-tank that is a plastic-lined vertical-cylindrical
tank of 2500 gallon capacity, with a gauge glass and electric heaters.
(g) Two motor-driven centrifugal type caustic pumps.
(h) Waste collection tank.
(i) The portions of the central acid and caustic chemical supply
systems that are dedicated solely to the Condensate Demineralizer Resin
Regeneration System.
(j) Associated piping, valves, instrumentation and mechanical
equipment.
Section 1.02 Steam Generator Blowdown Demineralizer Resin Regeneration
System. The Steam Generator Blowdown Demineralizer Resin Regeneration System for
each Unit recycles spent resin in the steam generator blowdown demineralizer and
is located in the Unit's turbine building. This system recycles spent resin by
chemical regeneration using acid and caustic treatment. Spent resin is treated
in place by injecting these chemicals directly into the
steam generator blowdown demineralizer vessels that hold the resin. There are
two mixed-bed demineralizer vessels operated in series for each Unit. This
allows isolation of an individual vessel for chemical regeneration while
blowdown flow is maintained in the other vessel.
The Steam Generator Blowdown Demineralizer Resin Regeneration System
includes the following equipment and components:
(a) One acid day-tank that is a 30 inch diameter x 36 inch plasite
lined tank.
(b) One acid supply package including acid supply pumps with
associated piping and instrumentation.
(c) One caustic day-tank with immersion heater.
(d) One caustic supply package including caustic supply pumps,
instantaneous heater and associated piping and instrumentation.
(e) Waste collection equipment including sumps and piping.
(f) The portions of the central acid and caustic chemical supply
systems that are dedicated solely to the Steam Generator Blowdown Demineralizer
Resin Regeneration System.
(g) Associated piping, valves, instrumentation and mechanical
equipment.
Section 1.03 Make-up Demineralizer Resin Regeneration System. The Make-up
Demineralizer Resin Regeneration System serves all three Units and recycles
spent resin from the make-up water demineralizer by chemical regeneration using
acid and caustic treatment. Spent resin is treated in place by injecting
chemicals directly into the make-up demineralizer vessels that hold the resin.
There are three mixed bed demineralizers. The system is operated with two mixed
beds in series with the third bed isolated for regeneration.
The Make-up Demineralizer Resin Regeneration System includes the following
components and equipment:
(a) One acid regenerant day tank that is a 238 gallon unlined steel
tank.
(b) One caustic regenerant day tank that is a fiberglass reinforced
tank of 3,396 gallon capacity and contains an electric immersion heater.
(c) Two plasite lined hot water storage tanks each with a 5519 gallon
capacity and two electric immersion heaters.
(d) Two rinse water pumps.
(e) Two acid injection pumps.
(f) Two caustic feed pumps.
A-2
(g) The portions of the central acid and caustic chemical supply
systems that are dedicated solely to the Make-up Demineralizer Resin
Regeneration System.
(h) Associated piping, valves, instrumentation and mechanical
equipment.
Section 1.04 Decontamination Facilities. The Decontamination Facilities
recycle solid waste consisting of contaminated tools and equipment by removing
radioactive contamination from such items.
There are four Decontamination Facilities; one in the Radwaste Building for
each Unit and a central facility for handling heavier tools and equipment that
cannot be handled by the smaller individual Decontamination Facilities.
The central decontamination facility includes the following equipment:
(a) Ultrasonic cleaning system.
(b) Spray booth with pressure and steam washers.
(c) Filtered turbulator apparatus.
(d) Decontamination tanks and sinks.
(e) Central decontamination building consisting of shielded
walls, filtered ventilation systems, air lock, laydown areas and associated
building services.
Each of the three Radwaste Building Decontamination Facilities includes the
following equipment:
(a) Ultrasonic cleaning system.
(b) Spray booth with turntable, pressure and steam washers.
(c) Tank, workbench and sink.
(d) The portion of each Radwaste Building housing Decontamination
Facilities.
Section 1.05 Water Reclamation Facility. The Water Reclamation Facility
will receive the sewage effluent from the Effluent Pipeline System and provide a
multistage biochemical treatment process, including (a) reduction of ammonia and
alkalinity by the use of trickling filters; (b) addition of lime slurry and
polymer in first stage solid contact clarifiers to remove phosphate, magnesium,
silica and some calcium; (c) addition of soda ash, polymer and carbon dioxide
gas in second-stage solid contact clarifiers to remove calcium carbonate; (d)
injection of sulfuric acid to reduce pH, polymer to aid in removal of suspended
solids and chlorine to control biological growth; and (e) gravity filtration
through graded media filters equipped for backwash. Sludge extracted from the
backwash and solid contact clarifier and dewatered in the Water Reclamation
Facility Water Pollution Control Facilities (which are not a part of the Series
B
A-3
Facilities) will be recalcined in a furnace provided for this purpose. The
Water Reclamation Facility also includes related valves, piping,
instrumentation, monitoring and other equipment.
Section 1.06 Sanitary Drainage and Treatment System (ST). The sanitary
drainage system collects and transports sanitary waste from Power Block
facilities, Water Reclamation Facility ancillary buildings and construction
facilities to the on-site sanitary treatment system.
The sanitary treatment system treats, clarifies, and returns the wastewater
to the WRF for reuse. Equipment includes: a wet well, a sewage lift station, a
surge tank, three package sewage treatment plants, a chlorine contact chamber, a
sump with two sump pumps, and piping, valves, controls, and instrumentation.
Also included are related groundwater monitoring xxxxx and equipment.
Section 1.07 Oily Waste and Nonradioactive Waste Systems (OW). The oily
waste system for each Unit collects, for processing and disposal, nonradioactive
waste from normally nonradioactive areas where oil may be present.
(a) Turbine building - OW drains and collects waste from the
equipment and floor drains. The waste is collected in one turbine building sump
and two condenser area sumps. The waste is normally discharged from the sumps to
the oil/water separator, oil/water separator sump, retention basin, and
eventually to the evaporation pond.
(b) Control building and diesel generator building - OW drains
and collects waste from the equipment and floor drains. The waste is discharged
from two control room sumps and two diesel generator sumps to the oil/water
separator, oil water separator sump, retention basin, and eventually to the
evaporation pond.
Each oily waste system consists of floor drains, equipment drains, vertical
drain risers, pipes, sumps, sump pumps, an oil/water separator, an oil/water
separator sump and associated valves, instrumentation and controls. Also
included are related groundwater monitoring xxxxx and equipment.
Section 1.08 Chemical Waste Systems (CM). The chemical waste system for
each Unit consists of five subsystems:
(a) The radioactive chemical waste subsystem collects by
gravity the corrosive radioactive waste from the chemical laboratory and
decontamination stations and transfers the waste to the chemical drain tank. The
chemical drain tank effluent is handled by the liquid radwaste system. This
subsystem consists only of drains and piping.
(b) The cooling water waste subsystem collects by gravity the
chemically treated cooling water from the auxiliary and radwaste building for
disposal. The waste collects in the cooling water holdup tank and is pumped to
the chemical waste neutralizer tank. From the neutralizer tank it is pumped to
either the retention basin and evaporation pond or the liquid radwaste holdup
tank. This subsystem consists of drains, a cooling water holdup tank, pumps,
valves, piping, controls and instrumentation.
A-4
(c) The condensate polishing demineralizer waste subsystem
collects and neutralizes the potentially radioactive waste for disposal to the
retention basin or the evaporation pond if it is nonradioactive, or discharges
to the liquid radwaste system if it is radioactive. This subsystem consists of
drains, sumps, sump pumps, chemical waste neutralizer tanks with agitators,
transfer pumps, piping, valves, controls and instrumentation.
(d) The spent regenerate waste subsystem collects and
neutralizes the rinse wastes from the makeup demineralizers for disposal. This
subsystem consists of drains, sumps, sump pumps, valves, controls and
instrumentation.
(e) The chemical tank drains located in the yard areas are
installed on concrete slabs with retaining curbs. Small sumps are provided to
collect equipment leakage. In some locations portable pumps are used to dispose
of the waste.
Also included is related groundwater monitoring equipment.
Section 1.09 Retention Basin (Sedimentation Basin - J. Hook). The retention
basin collects and disposes (by evaporation) of yard drainage to prevent
discharge of sedimentation to the Gila River and the groundwater regional
aquifer well water system. The basin consists of earthen dikes and related
groundwater monitoring xxxxx and equipment.
Section 1.10 Evaporation Pond.The evaporation pond collects start-up flush
water and cooling tower blowdown wastewater for disposal. This allows for
disposal of settleable solids and pollutants on a rubberized liner which
prevents the start-up and blowdown wastewater from entering the Gila River and
the groundwater regional aquifer well water system. The present pond is 250
surface acres. The future ponds will comprise an additional 455 acres. This
system includes the earthen dike surrounding the pond, a rubberized liner and
related environmental monitoring xxxxx and equipment.
Section 1.11 Water Reclamation Facility Pollution Control Systems. The
Water Reclamation Facility (WRF) air and water pollution control facilities
collect environmental pollutants to prevent their discharge to the environment
and/or treat such pollutants prior to such discharge. This pollution control
equipment includes:
(a) Air Pollution Control Facilities - Furnace stack gas pollution
control components include the cyclone separator, lime dust return screw and
rotary feeder, the precooler and venturi scrubber, the impingement tray
separator, the induced draft fan, all associated ducting, piping, valves,
controls and instrumentation and all piping to supply process water to this
equipment.
Lime and soda ash dust collection equipment includes dust collectors on
each of the storage and supply silos and associated instrumentation and piping,
and the filter separator at each unloading station and the associated piping and
instrumentation.
(b) Water Pollution Control Facilities - Sludge handling and
dewatering equipment includes:
A-5
(i) Sludge pumps and associated piping, valves, controls,
instrumentation and flush water piping at the first and second stage
clarifiers;
(ii) Thickeners and associated structures and sludge pumps, tunnel
sump pumps and associated piping, valves, controls, instrumentation, and
flush water piping for the first and second stage thickeners, the waste
thickeners, and the spent washwater thickeners;
(iii) Centrifuges, piping, valves, controls, instrumentation, flush
water piping, screw conveyors, and associated structures for the
classification, dewatering, and waste centrifuges;
(iv) Also included is related groundwater monitoring equipment.
Section 1.12 Gaseous Radwaste Systems (GRS).The gaseous radwaste system
(GRS) for each Unit collects and processes potentially radioactive gases
generated within the Plant so that offsite exposure is kept as low as reasonably
achievable (ALARA). High activity waste gas, containing primarily hydrogen and
nitrogen, is collected and stored in the oxygen-free system to guard against a
rapid hydrogen/oxygen reaction and to permit decay of short-lived isotopes.
Subsequent to decay, the decayed gases are sampled to determine their
constituency and radioactivity content, filtered, monitored, and released at a
controlled rate to the plant vent.
Each system is comprised of a surge tank, two prefilters, two waste gas
compressors, three waste gas decay tanks, one discharge filter, discharge flow
control valves and instrumentation and related radiation monitoring equipment.
Section 1.13 Solid Radwaste Systems (SRS).The solid radwaste system (SRS)
for each Unit handles radioactive waste consisting of trash, spent ion exchange
resins, waste evaporator concentrates, chemical drain tank effluents, crud tank
effluents, used filter cartridges, contaminated steam generator blowdown
demineralizer resins and contaminated condensate polishing demineralizer resins.
The wastes are solidified in the waste solidification system and stored in a
shielded storage location while awaiting shipment off site.
Spent resin from the fuel pool cooling system, liquid radwaste system ion
exchangers, the chemical and volume control system preholdup ion exchanger,
deborating ion exchanger and purification ion exchangers are sluiced to the high
activity spent resin tank or the low activity spent resin tank. The spent resin
tanks hold the resin until it is ready to be sluiced to the waste feed tank.
Radwaste from the crud tank, chemical drain tanks, spent resin tanks, and
concentrates from the liquid radwaste system are piped directly into the waste
feed tank.
Chemicals are added to the waste feed tank to adjust pH by the chemical
addition storage and feed subsystem. The cement handling and storage subsystem
delivers cement to the radwaste/cement mixing and filling subsystem.
The dry additive storage and feed subsystem delivers the dry chemical
additive to the radwaste/cement mixing and filling subsystem.
A-6
The radwaste/cement mixing and filling subsystem delivers radwaste from the
waste feed tank, mixes the radwaste with cement and dry chemical additives and
discharges the mixture to either a 55 gallon drum or disposable liner. This
subsystem also provides for capping, decontamination, swiping and placement of
solidified waste containers in a shielded storage location in the Unit,
transportation and temporary storage of the solidified waste containers.
Spent filter cartridges are transported to the solidification system
disposable liner or drum via a monorail, and remotely placed in a filter basket
inside the container. The filter basket holds the filter cartridge in place
while cement is poured around the filter cartridge encapsulating it.
Each system consists of a low activity spent resin tank and associated
piping, a high activity spent resin tank and associated piping, a resin
transfer/dewatering pump, a waste feed pump, a waste feed tank, a chemical
addition pump, a chemical addition tank, a waste/cement processor, a 30-ton
capacity overhead bridge crane, a container transfer cart and related switches,
valves and instrumentation. The system also includes related radiation
monitoring equipment.
Section 1.14 Future Interim on Site Low-level Radioactive Waste Storage
Facility (RS).The function of the Future Interim On Site Low-Level Radioactive
Waste Storage Facility (RS) is to provide the capabilities for handling and
storing for up to a maximum of five (5) years, solidified wastes and dry active
wastes, prior to shipment off site. Wastes temporarily held in the RS will be
ready for shipment off site without further processing.
This facility consists of a non-seismic concrete building, a metal sided
building, a truck bay and docking area, a control room, a container inspection
and decontamination station, a truck washdown station, a remotely operated
overhead crane, associated lighting, heating and ventilation systems, sumps,
drains and related instrumentation and monitoring equipment and related access
road and fencing.
Section 1.15 Liquid Radwaste Systems (LRS).The major functions of the
liquid radwaste system (LRS) for each Unit are to:
(a) Collect and store for processing radioactive or potentially
radioactive waste fluids from the following sources external to the Liquid
Radwaste System:
(i) Containment radwaste sumps
(ii) Radwaste building sumps
(iii) Auxiliary building sumps
(iv) Fuel building sumps
(v) Decontamination facility (Unit One only)
(vi) Radiochemistry lab
(vii) Solid radwaste resin transfer/dewatering pump
A-7
(viii) Condensate polishing and blowdown demineralizer regenerant
wastes
(ix) Turbine building sumps
(x) Auxiliary steam condensate receiver tank
(xi) Chemical waste neutralizer tank
(xii) Boric acid concentrator (BAC) bottoms
(xiii) BAC distillate.
(b) Process revived wastes by filtration, absorption, ion exchange,
and evaporation to obtain a maximum amount of high grade water for reuse in the
reactor plant systems. This system also includes related radiation monitoring
equipment.
(c) Minimize the quantity of liquid wastes which must be solidified
for offsite disposal.
Each system consists of three holdup tanks, two holdup pumps, chemical
drain tanks and pumps, ion exchange prefilters, an evaporator package, mixed bed
ion exchangers and an adsorption bed, recycle monitor tanks and pump,
concentrate monitor tanks and pumps, a caustic tank and batch tank, an acid tank
and batch tank, an anti-foam tank and pump, Y-strainers, a desiccant breather
and associated instrumentation, switches, valves and piping.
Section 1.16 Radwaste Buildings.The radwaste building for each Unit
contains systems used for the processing of liquid, solid, and gaseous
radioactive wastes generated in such Unit. The hot machine shop and the
decontamination station which have not been financed are also housed in the
radwaste building.
Each radwaste building is a three-story rectangular, seismic (category
IIe), reinforced concrete structure. A series of interior reinforced concrete
walls form compartments for housing waste-related equipment and provide
radiation shielding. The solid waste solidification, storage, and disposal areas
are serviced by a crane and monorail system. Each radwaste building is designed
to be independent of any other structure and is supported on a rigid foundation
mat.
Section 1.17 Filtration Equipment.The auxiliary building and the
containment building for each Unit each contain normal exhaust air filtration
units (AFU). Each AFU contains high efficiency particulate air (HEPA) filter
banks and charcoal absorbers that have been included in the financing. The
laundry and decontamination facility AFU contains HEPA filters that have been
included in the financing. The function of the HEPA filter banks and charcoal
absorbers is to maintain offsite exposure ALARA.
The condenser air removal system for each Unit contains HEPA filters,
charcoal absorbers and related mechanical equipment necessary to remove
radioactive contaminants from condenser vacuum pump discharges in order to
maintain offsite exposure ALARA. Also included is related effluent monitoring
equipment.
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Section 1.18 Radiation Laundry.The system is housed in the laundry and
decontamination facility which is located near the radwaste building of Unit 1,
and is a common facility for three units. The system uses four "RADKLEEN" dry
cleaning machines, especially designed by Health Physics Systems, Inc., for
decontamination of cloth and rubber protective clothing, and utilizes Dupont's
Valclene dry cleaning solvent. The system consists of cleaning chamber, solvent
tank, still drying fan, evaporator refrigeration compressor, and several
filters. The system contains two separate filtration systems. One set of micron
filters, arranged in the parallel banks, filters solvent before it enters the
cleaning drum. The other set of filters, arranged in series, comprises a
recirculation filtration system which continually removes contamination from
solvent in the contaminated sump, then returns the solvent to the clean sump.
The system does not require any cooling water, plumbing, or connected cooling
towers.
Section 1.19 Spent Fuel Storage and Handling System (SFS).There are three
Fuel Buildings at this three unit plant, one for each unit. Each Fuel Building
is a five-story reinforced concrete structure located adjacent to the
Containment Building. Each Fuel Building is approximately 107 feet tall (above
and below grade), 88 feet wide, and 124 feet long. Each Fuel Building contains
one spent fuel storage pool, new fuel unloading and storage areas, spent fuel
cask loading pit, fuel transfer canal, spent fuel cask washdown area, spent fuel
pool equipment rooms, spent fuel equipment laydown area, new fuel container
storage area and a railroad loading bay for spent fuel containers. The SFS for
each Unit includes the spent fuel storage pool, spent fuel cask loading pit,
spent fuel cask washdown area, spent fuel pool equipment rooms, spent fuel
equipment laydown area and the railroad loading bay and the portion of the Fuel
Building that houses such equipment.
Fuel assemblies are brought into the fuel handling building by truck in
shipping containers containing two assemblies each. The assemblies are unloaded
by means of the new fuel handling crane and stored on racks in the new fuel
storage pit. When needed, the new fuel handling crane lifts the fuel assembly
from the new fuel storage pit and carries it to a new fuel elevator, located at
the containment building end of the transfer canal, which lowers the assembly to
the floor of the transfer canal. The fuel handling machine then picks up the
assembly and places it on an upending device (xxxxxxx) in the transfer canal.
The xxxxxxx xxxxxx the upright fuel assembly to a horizontal position and puts
it on the fuel transfer car. The car carries the assembly through the transfer
tube to the reactor containment building. Spent fuel is removed from the
containment building and transferred back to the fuel handling building in the
reverse process. Once inside the fuel handling building, the spent fuel handling
machine places the spent fuel into high density storage racks in the spent fuel
pool for storage. Spent fuel is stored in the spent fuel pools prior to shipment
offsite. When spent fuel is to be shipped offsite a spent fuel cask is brought
into the fuel handling building by rail. The cask is then cleaned. The cask
handling bridge crane lifts the cask from the railcar into the cask loading pit
and the lid of the cask is removed. The cask loading pit is then flooded and the
spent fuel handling machine removes the fuel assembly to be shipped from the
spent fuel pool storage rack and transfers them into the spent fuel cask in the
cask loading pit. The cask is then capped and transferred by the bridge crane to
the spent fuel cask washdown area where it is inspected, cleaned and
decontaminated. The cask handling bridge crane then lifts the loaded cask to a
railcar for shipment offsite.
Each SFS consists of the following components:
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(a) Spent Fuel Cask Handling Bridge Crane - This 150-ton crane is
designed to lift and transport the spent fuel casks.
(b) Spent Fuel Pool (SFP) - The SFP is designed to contain 1329 spent
fuel assemblies in high density storage racks after addition of inserts which
have not been included in the financing. It is 41 feet 6 inches deep, 28 feet
wide, and 39 feet long and contains approximately 352,000 gallons of borated
water at operating level. The outer walls of the Fuel Building form two walls of
the SFP and the SFP is an integral structural part of the Fuel Building. It is
lined with stainless steel plate.
(c) Cask Loading Pit (CLP) - The CLP is designed to allow loading of
spent fuel into a cask for shipment offsite. It is approximately 45 feet deep,
16 feet wide and 16 feet long. It is connected to the SFP by a short canal.
(d) Cask Washdown Area - This area is designed to washdown a loaded
cask and inspect it prior to shipment.
(e) Spent Fuel Railroad Loading Bay - This area is 76 feet long by 25
feet wide and is used to bring railroad cars into the building in order to load
the spent fuel casks on the railroad cars for off-site shipment.
(f) Spent Fuel Equipment Laydown Area - This area is reserved for the
spent fuel cask handling tools and crane rigging.
(g) Spent-Fuel Pool Cooling and Cleanup System - This system is
designed to remove decay heat from the spent fuel assemblies and maintain
clarity and chemistry of the spent fuel pool water. The system is composed of
two subsystems, the spent fuel pool cooling system (SFPCS) and the spent fuel
pool cleanup system. The SFPCS is a closed loop system consisting of two pumps,
two heat exchangers, piping, valves, controls and instrumentation required to
form a complete functional system. All equipment is located within the Fuel
Building.
The spent fuel pool cleanup system is composed of two flow trains, each
consisting of a strainer, pump, filter and a mixed bed ion exchanger. Either one
or both trains can be aligned to clean the water in the Spent Fuel Pool. The
system also consists of the piping, valves, controls and instrumentation to form
a complete functional system. The pumps are located in the Fuel Building with
the remaining equipment contained in the Auxiliary Building. Only the equipment
and piping related to the spent fuel pool cleanup system that is located in the
Auxiliary Building itself is financed. No part of the Auxiliary Building is
included as part of the SFS.
(h) Fuel Building Ventilation System - This system filters, purifies,
and monitors normal building exhaust.
Section 1.20 Effluent Pipeline System.The Effluent Pipeline system is an
underground sewage effluent conveyance pipeline system to convey sewage effluent
from the Phoenix 91st Avenue and City of Xxxxxxxx water treatment plants to the
water reclamation facility at the site of the Plant, and includes (a)
approximately 28.5 miles of 114- and 96-inch diameter pipe operating by gravity
flow from the 91st Avenue and Tolleson interfaces to the Hassayampa Pumping
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Station, (b) the Hassayampa Pumping Station, and (c) approximately 8 miles of
66-inch diameter pipe from the Hassayampa Pumping Station to the water
reclamation facility.
Section 1.21 Containment Building.Each Unit has a Containment Building
housing the reactor and reactor coolant system for such Unit.
Each Containment Building is a Seismic Category I pre-stressed concrete
cylinder with a hemispherical dome. The base mat is a flat circular slab of
reinforced concrete. The interior of the structure is lined with a continuous,
welded steel plate one quarter inch thick. The Containment Building has an
approximate inside diameter of 106 feet and an inside height of 206.5 feet. The
base mat has an approximate diameter of 161 feet and a thickness of 10.5 feet.
Wall thickness varies from approximately 4 feet in the vertical walls to
approximately 3.5 feet at the apex of the dome.
Under the most severe of postulated loading conditions -- including the
combined effects of permanent loads, design basis Loss of Coolant Accident
loads, and either the safe-shutdown earthquake or tornado loads -- the
Containment Building is designed to maintain its structural and leak-tight
integrity. Together with isolation valves, penetration assemblies, and its
continuous, welded-steel liner, the structure contains the released fission
products and maintains a leak rate below the design leak rate levels.
The Containment Building is designed to provide long-term control of
fission products following an accident.
Housed within the Containment Building and supported by the base mat are
the reinforced concrete and structural steel internal structures which support
the reactor and reactor coolant system. These internal structures, the reactor
and reactor coolant system are not included in this financing.
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