Exhibit 4.6
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LOAN AGREEMENT
RESTATED AS OF MAY 1, 0000
XXXXXXX
XXXX XX XXXXXXX, XXXXXXX
AND
AVISTA CORPORATION
$66,700,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999A
DATED AS OF SEPTEMBER 1, 1999
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The amounts payable to the Issuer and certain other rights of the Issuer
under this Loan Agreement (except for amounts payable to, and certain rights of,
the Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06,
Section 5.07, Section 5.08 and Section 7.05 hereof and any rights of the Issuer
to receive notices, certificates, requests, requisitions, directions and other
communications hereunder) and the rights of the Issuer to the Company's First
Mortgage Bonds, or Substitute Collateral therefor that may be delivered by the
Company in accordance with Section 4.09 hereof, have been pledged and assigned
to X.X. Xxxxxx Trust Company, N.A., as Trustee under the Trust Indenture, dated
as of September 1, 1999, as amended and restated, from the Issuer. For the
purpose of perfecting the security interest of such Trustee in such amounts
payable and such rights assigned to such Trustee under the Montana Uniform
Commercial Code -- Secured Transactions, the counterpart of this Loan Agreement
actually delivered to the Trustee shall be deemed the original thereof.
Series 1999A Restated Loan Agreement
LOAN AGREEMENT
RESTATED AS OF MAY 1, 0000
XXXXXXX
XXXX XX XXXXXXX, XXXXXXX
AND
AVISTA CORPORATION
$66,700,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999A
DATED AS OF SEPTEMBER 1, 1999
The amounts payable to the Issuer and certain other rights of the Issuer
under this Loan Agreement (except for amounts payable to, and certain rights of,
the Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06,
Section 5.07, Section 5.08 and Section 7.05 hereof and any rights of the Issuer
to receive notices, certificates, requests, requisitions, directions and other
communications hereunder) and the rights of the Issuer to the Company's First
Mortgage Bonds, or Substitute Collateral therefor, that may be delivered by the
Company in accordance with Section 4.09 hereof, have been pledged and assigned
to X.X. Xxxxxx Trust Company, N.A., as Trustee under the Trust Indenture, dated
as of September 1, 1999, as amended and restated, from the Issuer. For the
purpose of perfecting the security interest of such Trustee in such amounts
payable and such rights assigned to such Trustee under the Montana Uniform
Commercial Code -- Secured Transactions, the counterpart of this Loan Agreement
actually delivered to the Trustee shall be deemed the original thereof.
This counterpart of the Loan Agreement has been actually delivered to the
Trustee and the Trustee acknowledges receipt thereof.
X.X. XXXXXX TRUST COMPANY, N.A., as Trustee
By /s/ Xxxx Xxxx Xxxxxx
----------------------------------------
Authorized Officer
Series 1999A Restated Loan Agreement
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TABLE OF CONTENTS
SECTION PAGE
Recitals.................................................................................................... 1
ARTICLE I DEFINITIONS........................................................................... 2
ARTICLE II REPRESENTATIONS, WARRANTIES AND AGREEMENTS............................................ 2
Section 2.01. Representations, Warranties and Agreements of Issuer.................................. 2
Section 2.02. Representations, Warranties and Agreements of Company................................. 4
ARTICLE III ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF PROCEEDS OF THE BONDS;
THE PROJECT........................................................................... 7
Section 3.01. Issuance of Bonds..................................................................... 7
Section 3.02. Issuance of Other Obligations......................................................... 7
Section 3.03. The Loan; Disposition of Bond Proceeds and Certain Other Moneys....................... 7
Section 3.04. Changes to Project.................................................................... 8
ARTICLE IV LOAN PAYMENTS; PAYMENTS TO REMARKETING AGENT AND TRUSTEE; OTHER
OBLIGATIONS........................................................................... 8
Section 4.01. Loan Payments......................................................................... 8
Section 4.02. Payments of Purchase Price............................................................ 9
Section 4.03. Payments Assigned; Obligation Absolute................................................ 9
Section 4.04. Payment of Expenses................................................................... 9
Section 4.05. Indemnification....................................................................... 9
Section 4.06. Payment of Taxes and Charges in Lieu Thereof.......................................... 10
Section 4.07. Credit Facility....................................................................... 11
Section 4.08. Compliance With Prior Agreement....................................................... 12
Section 4.09. Issuance, Delivery and Surrender of First Mortgage Bonds and Substitute
Collateral........................................................................ 12
ARTICLE V SPECIAL COVENANTS..................................................................... 14
Section 5.01. Maintenance of Existence; Conditions Under Which Exceptions Permitted................. 14
Section 5.02. Permits or Licenses................................................................... 14
Section 5.03. Arbitrage Covenant.................................................................... 14
Section 5.04. Financing Statements.................................................................. 15
Section 5.05. Covenants With Respect to Tax-Exempt Status of the Bonds.............................. 15
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SECTION PAGE
Section 5.06. Indemnification of Issuer............................................................. 15
Section 5.07. Records of Company; Maintenance and Operation of the Project.......................... 16
Section 5.08. Right of Access to the Project........................................................ 16
Section 5.09. Remarketing Agent..................................................................... 17
Section 5.10. Credit Ratings........................................................................ 17
Section 5.11. Purchases of PARS Rate Bonds.......................................................... 17
Section 5.12. Credit Facility....................................................................... 17
ARTICLE VI ASSIGNMENT............................................................................ 17
Section 6.01. Conditions............................................................................ 17
Section 6.02. Documents Furnished to Trustee........................................................ 18
Section 6.03. Limitation............................................................................ 18
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES........................................................ 18
Section 7.01. Events of Default..................................................................... 18
Section 7.02. Force Majeure......................................................................... 19
Section 7.03. Remedies.............................................................................. 20
Section 7.04. No Remedy Exclusive................................................................... 20
Section 7.05. Reimbursement of Attorneys' Fees...................................................... 20
Section 7.06. Waiver of Breach...................................................................... 21
ARTICLE VIII PURCHASE OR REDEMPTION OF BONDS....................................................... 21
Section 8.01. Redemption of Bonds................................................................... 21
Section 8.02. Purchase of Bonds..................................................................... 21
Section 8.03. Obligation to Prepay.................................................................. 21
Section 8.04. Compliance With Indenture............................................................. 22
ARTICLE IX MISCELLANEOUS......................................................................... 23
Section 9.01. Term of Agreement..................................................................... 23
Section 9.02. Notices............................................................................... 23
Section 9.03. Parties in Interest................................................................... 23
Section 9.04. Amendments............................................................................ 24
Section 9.05. Counterparts.......................................................................... 24
Section 9.06. Severability.......................................................................... 24
Section 9.07. Governing Law......................................................................... 24
Signatures.................................................................................................. 25
EXHIBIT A -- Project Description
Series 1999A Restated Loan Agreement
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LOAN AGREEMENT
This LOAN AGREEMENT, dated as of September 1, 1999, as restated in its
entirety by that certain First Supplemental Loan Agreement, dated as of May 1,
2005, between the Issuer (as defined below) and the Company (as defined below),
is between the CITY OF FORSYTH, MONTANA, a political subdivision duly organized
and existing under the Constitution and laws of the State (the "Issuer"), and
AVISTA CORPORATION, a corporation duly organized under the laws of the State of
Washington and duly qualified to conduct business in the State (the "Company").
RECITALS:
A. The Issuer is authorized by the provisions of the Act to issue one or
more series of its revenue bonds to finance all or part of the cost of projects
consisting of exempt facilities (as such term is used in the Code) located
within the territorial limits of the Issuer.
B. The Act provides that payment of the principal of and interest on
revenue bonds issued thereunder shall be secured by a pledge of the revenues out
of which such revenue bonds shall be payable and may be secured by a pledge of
an agreement relating to a project.
C. The Issuer has previously issued the Prior Bonds on behalf of the
Company for the purpose of refinancing a portion of the costs of acquiring and
improving the Project.
D. The Issuer is authorized by the Act to issue its revenue refunding
bonds to refund the Prior Bonds.
E. By proper action of its governing body taken pursuant to and in
accordance with the provisions of the Act, the Issuer has authorized and
undertaken to issue its Pollution Control Revenue Refunding Bonds (Avista
Corporation Colstrip Project) Series 1999A and the issuance of the Bonds to
refund the Prior Bonds is authorized by the provisions of the Act.
F. The issuance of the Bonds to refund the Prior Bonds will provide
financing on more advantageous terms for the cost of the Project financed by the
Prior Bonds.
G. The Bonds shall be issued under and pursuant to the Trust Indenture,
dated as of September 1, 1999, between the Issuer and Chase Manhattan Bank and
Trust Company, National Association, as Trustee, pursuant to which the Issuer
shall pledge and assign to the Trustee certain rights of the Issuer hereunder.
H. Pursuant to this Agreement, the Issuer will loan the proceeds of the
Bonds to the Company to provide financing for the Project, and the Company
agrees to make, or cause to be made, payments sufficient to pay when due
(whether at stated maturity, by acceleration or otherwise) the principal of and
premium, if any, and interest on the Bonds.
Series 1999A Restated Loan Agreement
I. The Company agrees under this Agreement to pay, or cause to be paid,
when due, the purchase price of Bonds purchased pursuant to the terms of the
Indenture.
J. The issuance, sale and delivery of the Bonds and the execution and
delivery of this Agreement and the Indenture have been in all respects duly and
validly authorized in accordance with the Act and the Bond Resolution.
K. The Company and Ambac Assurance Corporation, a Wisconsin stock
insurance company, as Provider of the Credit Facility, have agreed to enter into
that certain Insurance Agreement, dated as of September 1, 1999, pursuant to
which the Provider is to issue its Municipal Bond Insurance Policy to guarantee
payment of the principal of the Bonds upon the stated maturity thereof, the
redemption price of the Bonds upon certain mandatory redemption and interest on
the Bonds as the same accrues and becomes due and payable.
L. The Company has issued and delivered the First Mortgage Bonds to the
Trustee to evidence and secure the payment of certain of its obligations
hereunder.
In consideration of the respective representations and agreements
contained in this Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All words and terms used but not otherwise defined in this Agreement,
shall for all purposes of this Agreement have the meanings specified in Article
I of the Indenture, unless the context clearly requires otherwise. In addition,
the following words and terms shall have the following meanings when used in
this Agreement:
"Affiliate" means any entity controlling, controlled by or under common
control with the Company.
"Indenture" means the Trust Indenture, dated as of September 1, 1999,
between the Issuer and the Trustee, relating to the issuance of the Bonds as
such Trust Indenture may be supplemented and amended from time to time as
therein permitted.
The words "hereto," "hereunder" and other words of similar import refer to
this Agreement as a whole.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
SECTION 2.01. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ISSUER. The
Issuer represents, warrants and agrees that:
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(a) The Issuer is a political subdivision of the State, duly
organized and validly existing under the Constitution and laws of the
State.
(b) Under the Act, the Issuer has the power to enter into the
transactions contemplated by this Agreement and the Indenture and to carry
out its obligations hereunder and thereunder, including the issuance and
sale of the Bonds. By proper action of its governing body, the Issuer has
been duly authorized to execute, deliver and duly perform this Agreement
and the Indenture and to issue and sell the Bonds and has made all
determinations and findings as and where required by Section 90-5-106 of
the Act.
(c) The aggregate principal amount of the Bonds authorized to be
issued under the Indenture for the purpose of refunding the Prior Bonds
does not exceed the aggregate principal amount of the Prior Bonds now
outstanding.
(d) The Prior Agreement and the Prior Indenture are each in full
force and effect and have not been amended or supplemented.
(e) The proceeds of the sale of the Bonds (i) will be deposited with
the Prior Trustee for deposit into the Prior Bond Fund to provide a
portion of the moneys necessary for the Refunding and (ii) will be applied
by the Prior Trustee to redeem the Prior Bonds pursuant to the Prior
Indenture on the Redemption Date. The Prior Bonds are now outstanding in
the principal amount of $66,700,000. Prior to the issuance and delivery of
the Bonds, the Prior Trustee will be given irrevocable instructions and
will be directed to call all of the Prior Bonds for redemption on the
Redemption Date.
(f) The Bonds are to be issued under and secured by the Indenture,
pursuant to which certain of the Issuer's right, title and interest in
this Agreement and the revenues derived by the Issuer pursuant to this
Agreement will be pledged and assigned to the Trustee as security for
payment of the principal and purchase price of, premium, if any, and
interest on the Bonds.
(g) Neither the execution and delivery of this Agreement or the
Indenture, the issuance and sale of the Bonds, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, the Tax
Certificate, the Indenture or the Bonds conflicts with or results in a
breach of the terms, conditions or provisions of any restriction or any
agreement or instrument to which the Issuer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(h) The Issuer has not assigned or pledged and will not assign or
pledge its interest in this Agreement other than to secure the Bonds.
(i) To the knowledge of the Issuer, after due inquiry, no litigation
is pending or threatened against the Issuer to restrain or enjoin the
issuance or sale of the Bonds or in any way affecting any authority for or
the validity of the Bonds, the Indenture, this
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Agreement or the existence or powers of the Issuer or the right of the
Issuer under the Act to refinance a portion of the costs of the Project
through the issuance of the Bonds.
(j) To the knowledge of the Issuer, after due inquiry, no event has
occurred and no condition exists which, upon the issuance of the Bonds,
would constitute an event of default on the part of the Issuer under the
Prior Indenture.
(k) The Issuer will not knowingly take or omit to take any action
reasonably within its control the taking or omission of which would
adversely affect the Tax-Exempt status of the Bonds. The Issuer will file
or cause to be filed with the United States Department of Treasury the
information required by Section 149(e) of the Code.
(l) A public hearing relating to the Refunding for the Project was
held on May 4, 1999, following public notice thereof, pursuant to Section
147(f) of the Code, and the public hearing and approval requirements of
Section 147(f) of the Code have been satisfied.
(m) Within the meaning of Sections 2-2-121 and 2-2-125, Montana Code
Annotated, as amended, no "public officer," "public employee," "officer"
or "employee" of the Issuer is engaged as counsel, consultant,
representative, or agents of the Company, or has a substantial financial
interest in the Company. None of the officers, deputies, or employees of
the Issuer or employees having terminated their employment with the Issuer
within the six months immediately preceding this Agreement are "interested
in" this Agreement, the Indenture, the Bonds or the transactions
contemplated thereby, within the meaning of Section 2-2-201, Montana Code
Annotated, as amended.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Issuer shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
SECTION 2.02. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF COMPANY. The
Company represents, warrants and agrees that:
(a) It is a corporation duly organized and validly existing under
the laws of the State of Washington and duly qualified as a foreign
corporation in good standing in the State, is not in violation of any
provision of its Articles of Incorporation or its Bylaws, in each case as
the same have been amended, has full corporate power to own its properties
and conduct its business, and has the corporate power to enter into, and
by proper corporate action has duly authorized the execution and delivery
of, this Agreement and the Tax Certificate, and has the power to issue and
pledge the First Mortgage Bonds as contemplated herein and in the Company
Mortgage.
(b) Neither the execution and delivery of this Agreement or the Tax
Certificate, the consummation of the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement (including, without limitation, the issuance and delivery of the
First Mortgage Bonds) or the Tax
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Certificate conflicts with or will result in a breach of any of the terms,
conditions or provisions of any law or judgment to which the Company or
its property or assets are subject or of any corporate restriction
contained in its Articles of Incorporation or its Bylaws, in each case as
the same have been amended, or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitutes, with or
without the giving of notice or lapse of time or both, a default under any
of the foregoing, or results in the creation or imposition of any lien,
charge or encumbrance whatsoever upon any of the property or assets of the
Company (other than any lien, charge or encumbrance which may be created
in favor of the Trustee by the Company Mortgage and the Company
Supplemental Indenture) under the terms of any instrument or agreement.
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Company and is a legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, usury or other similar laws affecting the rights of creditors
generally, equitable principles relating to the availability of remedies
and principles of public or governmental policy limiting the
enforceability of the indemnification and contribution provisions.
(d) Other than the orders of the Washington Utilities and
Transportation Commission, the California Public Utilities Commission, the
Idaho Public Utilities Commission and the Oregon Public Utility Commission
and the approval by the Issuer, all of which orders and approvals will
have been received and be in effect prior to the initial authentication
and delivery of the Bonds, no consent, approval, authorization or order
of, or registration with, any court or governmental or regulatory agency
or body is required with respect to the Company for the execution,
delivery and performance by the Company of this Agreement and the Tax
Certificate.
(e) The Company has received an executed counterpart of the
Indenture and hereby consents to and approves of the provisions thereof.
(f) The information relating to the Project furnished by the Company
in writing to Xxxxxxx and Xxxxxx LLP, as Bond Counsel, in connection with
the issuance by the Issuer of the Bonds, is, to the best of the Company's
knowledge, true and correct.
(g) The Prior Agreement and the Prior Indenture are in full force
and effect and have not been amended or supplemented.
(h) To the best knowledge of the Company, no event has occurred and
is continuing under the provisions of the Prior Indenture that now
constitutes, or with the lapse of time or the giving of notice, or both,
would constitute, an event of default under the Prior Indenture.
(i) Upon the initial authentication and delivery of the Bonds, the
Company has given or will give timely notice as required by the provisions
of the Prior Agreement
Series 1999A Restated Loan Agreement
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of the Company's intent to prepay the amounts payable thereunder to
provide for the redemption of the Prior Bonds on the Redemption Date.
(j) The aggregate principal amount of Bonds authorized to be issued
under the Indenture does not exceed the aggregate principal amount of the
Prior Bonds now Outstanding.
(k) The Company does not, as of the date of issuance of the Bonds,
reasonably expect any use of moneys derived from the proceeds of the Bonds
or any investment or reinvestment thereof or from the sale of the Project
which would cause the Bonds to be classified as "arbitrage bonds" within
the meaning of Section 148 of the Code.
(l) All of the proceeds of the Prior Bonds, including the investment
earnings thereon, have been disbursed in accordance with the provisions of
the Prior Indenture and the Prior Agreement and there are no proceeds of
the Prior Bonds, or investment earnings therefrom, or any other moneys
being held by the Prior Trustee under the Prior Indenture.
(m) The Pollution Control Facilities that comprise the Project
constitute Exempt Facilities and consist of those facilities described in
Exhibit A hereto (as such Exhibit A is from time to time amended or
supplemented in accordance with Section 3.04 hereof), and the Company
shall not consent to any changes in the Project which would adversely
affect the qualification of the Project as a "project" under the Act or
adversely affect the Tax-Exempt status of the Bonds.
(n) Substantially all of the proceeds of the Prior Bonds have been
expended for the purpose of acquiring, constructing and improving the
Project, which constitutes Exempt Facilities. None of the proceeds of the
Prior Bonds were used (i) to acquire land (or an interest therein) or (ii)
to acquire any property (or an interest therein) unless the first use of
such property was pursuant to such acquisition, all within the meaning of
Section 147 of the Code.
(o) The Montana Department of Health and Environmental Sciences has
certified that the pollution control facilities constituting part of the
Project, as designed, are in furtherance of the purpose of abating or
controlling atmospheric pollutants or contaminants, and water pollution,
as the case may be.
(p) No construction, reconstruction or acquisition (within the
meaning of the Code) of the Project was commenced prior to the taking of
official action by the Issuer with respect thereto and the Project has
been placed in service.
(q) The average maturity of the Bonds does not exceed 120% of the
average reasonably expected economic life of the Project.
(r) All of the Prior Bonds will be redeemed within 90 days of the
date of the initial authentication and delivery of the Bonds, and all of
the proceeds of the sale of the Bonds will be spent within 90 days of the
initial authentication and delivery of the Bonds.
Series 1999A Restated Loan Agreement
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(s) The Project (i) was designed to meet applicable federal, state
and local requirements for the control of pollution or the disposal of
solid waste, (ii) was and is to be used solely for purposes contemplated
by the Act, and (iii) is located within the boundaries of Rosebud County,
Montana.
(t) The representations, warranties and covenants of the Company set
forth in the Project Certificate are incorporated herein by reference and
are hereby made a part of this Agreement as if set forth herein.
(u) The Company will cooperate with the Issuer in filing or causing
to be filed with the United States Department of Treasury the information
required by Section 149(e) of the Code.
(v) The Company will pay the principal of and premium, if any, and
interest to the Redemption Date on all Prior Bonds that are validly
presented to the Company for payment after the Prior Trustee has paid to
the Company, in accordance with Section 4.08 of the Prior Indenture, any
moneys held in trust for the payment of the principal of and premium, if
any, and interest on the Prior Bonds.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Company shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
ARTICLE III
ISSUANCE OF THE BONDS; THE LOAN;
DISPOSITION OF PROCEEDS OF THE BONDS; THE PROJECT
SECTION 3.01. ISSUANCE OF BONDS. In order to refinance a portion of the cost
of the Project by effecting the Refunding, the Issuer shall issue the Bonds
under and in accordance with the Act and pursuant to the Indenture. The Company
hereby approves the issuance of the Bonds and all terms and conditions thereof.
SECTION 3.02. ISSUANCE OF OTHER OBLIGATIONS. The Issuer and the Company
expressly reserve the right to enter into, to the extent permitted by law, an
agreement or agreements other than this Agreement with respect to the issuance
by the Issuer, under an indenture or indentures other than the Indenture, of
obligations to provide additional funds to pay costs of facilities in addition
to the Project or to provide for the refunding of all or any principal amount of
the Bonds. Such obligations will not be entitled to the benefits of the
Indenture, any First Mortgage Bonds or the Credit Facility.
SECTION 3.03. THE LOAN; DISPOSITION OF BOND PROCEEDS AND CERTAIN OTHER
MONEYS. The Issuer shall lend to the Company the proceeds of the issuance and
sale of the Bonds for the purposes specified in Section 3.01 of this Agreement.
The Issuer and the Company shall, simultaneously with the delivery of the Bonds,
cause such proceeds, other than accrued interest,
Series 1999A Restated Loan Agreement
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if any, to be transferred to the Prior Trustee for deposit into the Prior Bond
Fund to be used to pay the principal amount of the Prior Bonds upon their
redemption on the Redemption Date.
SECTION 3.04. CHANGES TO PROJECT. The Company may at its own expense cause
the Project to be remodeled or cause such substitutions, modifications and
improvements to be made to the Project from time to time as the Company, in its
discretion, may deem to be desirable for its uses and purposes, which
remodeling, substitutions, modifications and improvements shall be included
under the terms of this Agreement as part of the Project; provided, however,
that no such remodeling, substitutions, modifications or improvements shall
change the description of the Project set forth in Exhibit A to this Agreement
or change the function of any principal component of the Project described in
Exhibit A to this Agreement unless, in either case, the Trustee and the Issuer
first receive a Favorable Opinion of Bond Counsel with respect to such change.
If any such supplement or amendment affects the description of the Project, the
Company and the Issuer will amend Exhibit A to this Agreement to reflect such
supplement or amendment, which supplement or amendment will not be considered as
an amendment to this Agreement requiring the consent of any Owner, the Trustee
or the Provider for the purposes of Article XII of the Indenture.
ARTICLE IV
LOAN PAYMENTS; PAYMENTS TO REMARKETING AGENT AND TRUSTEE;
OTHER OBLIGATIONS
SECTION 4.01. LOAN PAYMENTS. (a) As and for repayment of the loan made to the
Company by the Issuer pursuant to Section 3.03 hereof, the Company shall pay to
the Trustee, for the account of the Issuer, an amount equal to the aggregate
principal amount of and the premium, if any, on the Bonds from time to time
Outstanding and, as interest on its obligation to pay such amount, an amount
equal to interest on the Bonds, such amounts to be paid in installments due on
the dates, in the amounts and in the manner provided in the Indenture for the
payment of the principal of and premium, if any, and interest on the Bonds,
whether at maturity, upon redemption, acceleration or otherwise; provided,
however, that the obligation of the Company to make any such payment hereunder
shall be reduced by the amount of any moneys held by the Trustee under the
Indenture and available for such payment; and provided further that the
obligation of the Company to make any payment hereunder shall be deemed to be
satisfied and discharged to the extent of the corresponding payment made by the
Company of principal of or premium, if any, or interest on the First Mortgage
Bonds.
(b) In the event the Company shall fail to make any payment required by
Section 4.01(a) hereof with respect to the principal of and premium, if any, and
interest on any Bond, the payment so in default shall continue as an obligation
of the Company until the amount in default shall have been fully paid, and the
Company will pay interest on any overdue amount with respect to principal of
such Bond and, to the extent permitted by law, on any overdue amount with
respect to premium, if any, and interest on such Bond, at the interest rate then
borne by such Bond until paid.
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SECTION 4.02. PAYMENTS OF PURCHASE PRICE. The Company shall pay or cause to
be paid for its account to the Trustee amounts equal to the amounts to be paid
by the Trustee as the purchase price for such Bonds pursuant to Section 3.01 and
Section 3.02 of the Indenture in respect of Outstanding Bonds, such amounts to
be paid to the Trustee on the dates such payments are to be made pursuant to
Section 3.01 and Section 3.02 of the Indenture; provided, however, that the
obligation of the Company to make any such payment hereunder shall be reduced by
the amount of any moneys held by the Trustee under the Indenture and available
for such payment.
SECTION 4.03. PAYMENTS ASSIGNED; OBLIGATION ABSOLUTE. It is understood and
agreed that the Loan Payments and all payments to be made by the Company on the
First Mortgage Bonds are, by the Indenture, pledged and assigned by the Issuer
to the Trustee pursuant to the Indenture, and that all right, title and interest
of the Issuer hereunder (except for amounts payable to, and the rights of, the
Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06, Section
5.07, Section 5.08 and Section 7.05 hereof and the Issuer's rights to receive
notices, certificates, requests, requisitions, directions and other
communications hereunder), including the right to delivery of the First Mortgage
Bonds, are pledged and assigned to the Trustee pursuant to the Indenture. The
Company assents to such pledge and assignment and agrees that the obligation of
the Company to make the Loan Payments and payments to the Trustee under Section
4.02 hereof and to make the payments on the First Mortgage Bonds shall be
absolute, irrevocable and unconditional and shall not be subject to
cancellation, termination or abatement, or to any defense other than payment, or
to any right of setoff, counterclaim or recoupment arising out of any breach
under this Agreement or the Indenture or otherwise by the Company, the Trustee,
the Remarketing Agent, the Provider, the Auction Agent, the Broker-Dealer or any
other party, and, further, that the Loan Payments and the other payments due
hereunder and on the First Mortgage Bonds shall continue to be payable at the
times and in the amounts herein and therein specified whether or not the
Project, or any portion thereof, shall have been destroyed by fire or other
casualty, or title thereto, or the use thereof, shall have been taken by the
exercise of the power of eminent domain, and that there shall be no abatement of
or diminution in any such payments by reason thereof, whether or not the Project
shall be used or useful and whether or not any applicable laws, regulations or
standards shall prevent or prohibit the use of the Project or for any other
reason. The Project shall not constitute any part of the Trust Estate or any
part of the security for the Bonds.
SECTION 4.04. PAYMENT OF EXPENSES. The Company shall pay all of the
Administration Expenses of the Issuer, the Trustee, the Paying Agent, the
Registrar, the Auction Agent, the Broker Dealers, the Securities Depository,
Moody's and S&P under the Indenture and of any Remarketing Agent under a
Remarketing Agreement directly to each such entity. The Company shall also pay
all of the expenses of the Prior Trustee in connection with the Refunding and
all other reasonable fees and expenses incurred in connection with the issuance
of the Bonds, including, but not limited to, all costs associated with any
discontinuance of the book-entry system described in Section 2.16 of the
Indenture. The obligations of the Company under this Section 4.04 shall survive
the termination of this Agreement.
SECTION 4.05. INDEMNIFICATION. The Company releases the Trustee, the Paying
Agent and the Registrar and their respective officers, agents, servants and
employees from, agrees that the Trustee, the Paying Agent and the Registrar and
their respective officers, agents, servants and
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employees shall not be liable for, and agrees to indemnify and hold free and
harmless the Trustee, the Paying Agent and the Registrar and their respective
officers, agents, servants and employees from and against, any liability for any
loss or damage to property or any injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Project, except in any case
as a result of the negligence or willful misconduct of the Trustee, the Paying
Agent and the Registrar and their respective officers, agents, servants and
employees.
The Company will indemnify and hold free and harmless the Trustee, the
Paying Agent and the Registrar and their respective officers, agents, servants
and employees from and against any loss, claim, damage, tax, penalty, liability,
disbursement, litigation or other expenses, attorneys' fees and expenses or
court costs arising out of, or in any way relating to, the execution or
performance of this Agreement, the Tax Certificate, the Auction Agreement, the
issuance or sale of the Bonds, the issuance of the First Mortgage Bonds, the
Refunding, the acceptance or administration of the trust under the Indenture or
any other cause whatsoever pertaining to this Agreement, the Tax Certificate,
the Indenture, the Auction Agreement or the Credit Facility, except in any case
as a result of the negligence or willful misconduct of the Trustee, the Paying
Agent and the Registrar or their respective officers, agents, servants and
employees.
The obligations of the Company under this Section 4.05 shall survive the
termination of this Agreement.
SECTION 4.06. PAYMENT OF TAXES AND CHARGES IN LIEU THEREOF. (a) The Company
covenants and agrees that it will, from time to time for so long as the Company
has an ownership interest in the Project, promptly pay and discharge or cause to
be paid and discharged when due its share of all taxes, assessments, levies,
duties, imposts and governmental, utility and other charges lawfully imposed
upon the Project or any part thereof or upon income and profits thereof or any
payments hereunder or on the First Mortgage Bonds. In the event that the Company
sells or otherwise transfers its interest in the Project while the Bonds are
Outstanding, the Company shall require the purchasers or transferor of the
Company's interest in the Project to assume the Company's obligations under this
Section 4.06(a).
(b) The Company shall pay or cause to be satisfied and discharged or make
adequate provision to satisfy and discharge (including the provisions of
adequate bonding therefor) within 60 days after the same shall accrue, any lien
or charge upon the Loan Payments or payments under Section 4.02 hereof or
amounts payable on the First Mortgage Bonds, and all lawful claims or demands
for labor, materials, supplies or other charges which, if unpaid, might be or
become a lien thereon.
(c) Notwithstanding subsections (a) and (b) of this Section, the Company
may, at its expense and in its own name and behalf or in the name and behalf of
the Issuer, in good faith contest any such liens, taxes, assessments and other
charges and, in the event of any such contest, may permit such liens, taxes,
assessments or other charges so contested to remain unpaid during the period of
such contest and any appeal therefrom; provided further that during such period
enforcement of such contested item is effectively stayed, unless by nonpayment
of any such items the lien of the Indenture as to the amounts payable hereunder
or on the First Mortgage Bonds will be materially endangered, in which event the
Company shall promptly pay and cause to be
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satisfied and discharged all such unpaid items. The Issuer will cooperate fully
with the Company in any such contest. In the event that the Company shall fail
to pay any of the foregoing items required by this Section to be paid by the
Company, the Issuer may (but shall be under no obligation to) pay the same, and
any amounts so advanced therefor by the Issuer shall become an additional
obligation of the Company to the Issuer. The Company agrees to repay the amounts
so advanced, from the date thereof, together (to the extent permitted by law)
with interest thereon until paid at a rate per annum which is one percentage
point greater than the highest rate per annum then borne by any of the Bonds.
SECTION 4.07. CREDIT FACILITY. (a) The Company may at any time provide for a
Change of Credit Facility, provided that the Company delivers to the Trustee,
any Auction Agent and any Remarketing Agent, not less than five Business Days
prior to the date on which the Trustee must notify the Owners of a Change of
Credit Facility pursuant to Section 2.18 of the Indenture and prior to the
effective date of any such Change of Credit Facility, the following:
(1) a notice which (A) states the effective date of the Change of
Credit Facility, (B) describes the terms of the Change of Credit Facility,
and (C) directs the Trustee to give notice pursuant to Section 2.18(a) of
the Indenture;
(2) a Favorable Opinion of Bond Counsel with respect to such Change
of Credit Facility and stating, in effect, that such change of Credit
Facility is authorized under this Agreement;
(3) a certificate of an Authorized Company Representative as to
whether the Bonds are then rated by either Moody's or S&P, or both; and
(4) written evidence from Moody's, if the Bonds are then rated by
Moody's, and from S&P, if the Bonds are then rated by S&P, in each case to
the effect that such rating agency has reviewed the proposed Change of
Credit Facility and that such Change of Credit Facility will not, by
itself, result in a reduction, suspension or withdrawal of its rating or
ratings of the Bonds.
(b) In lieu of satisfying the requirements of subsection (a) above, the
Company may provide for a Change of Credit Facility at any time that the Bonds
are subject to optional redemption pursuant to Section 4.02(b) of the Indenture,
provided that the Company delivers to the Trustee, any Auction Agent and any
Remarketing Agent not less than 30 days before the effective date of the Change
of Credit Facility:
(1) a notice which (A) states the effective date of the Change of
Credit Facility, (B) describes the terms of the Change of Credit Facility,
(C) directs the Trustee to give notice pursuant to Section 2.18 of the
Indenture that the Bonds are subject to mandatory purchase, in whole, on
or before the effective date of the Change of Credit Facility in
accordance with Section 3.02(b) of the Indenture, and (D) directs the
Trustee to take any other action as shall be necessary for the Trustee to
take to effect the Change of the Credit Facility; and
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(2) on or before the effective date of the Change of Credit
Facility, the Company shall furnish to the Trustee an opinion of Bond
Counsel satisfying the requirements of Section 4.07(a)(2) above.
(c) The Company may provide for one or more extensions of a Credit
Facility for any period commencing after its then-current expiration date
without complying with the foregoing provisions of this Section.
(d) The Company may rescind its election to make a Change of Credit
Facility at any time prior to the effective date thereof.
SECTION 4.08. COMPLIANCE WITH PRIOR AGREEMENT. The Company hereby confirms
its obligations under the Prior Agreement to furnish any moneys required to be
deposited with the Prior Trustee under the Prior Indenture in order to redeem
the Prior Bonds on the Redemption Date, to the extent that the proceeds of the
Bonds on deposit in the Prior Bond Fund, together with any investment earnings
thereon, is less than the amount required to pay the principal of and applicable
redemption premium and interest on the Prior Bonds upon their redemption on the
Redemption Date, in accordance with the terms and conditions of the Prior
Indenture.
SECTION 4.09. ISSUANCE, DELIVERY AND SURRENDER OF FIRST MORTGAGE BONDS AND
SUBSTITUTE COLLATERAL.
(a) The obligation of the Company pursuant to Section 4.01 hereof to repay
the loan made to it by the Issuer pursuant to Section 3.03 hereof may be secured
by the First Mortgage Bonds or, subject to Section 4.09(f) hereof, by Substitute
Collateral.
(b) The First Mortgage Bonds and any Substitute Collateral shall (i)
mature on the same date and in the same principal amount as the Bonds, (ii) bear
interest at the same rate and be payable at the same times as the Bonds, (iii)
contain mandatory redemption provisions correlative to the mandatory redemption
provisions of Section 4.03 of the Indenture, and (iv) subject to the provisions
of Section 4.09(c) hereof, require payments of the principal thereof and
premium, if any, and interest thereon to be made to the Trustee for the account
of the Issuer. The First Mortgage Bonds shall be delivered to and registered in
the name of the Trustee (or, subject to Section 5.12 of the Indenture, the
Trustee's nominee) for the account of the Issuer and the benefit of the Owners
from time to time of the Bonds and shall be held, voted, transferred and
surrendered by the Trustee subject to and in accordance with the respective
provisions of this Agreement and the Indenture. Any moneys received by the
Trustee with respect to the First Mortgage Bonds shall be used to make the
corresponding payment then due of principal of and premium, if any, or interest
on the Bonds in accordance with the terms of the Bonds and the Indenture. Any
proceeds of the First Mortgage Bonds in excess of the amounts necessary to pay
in full the principal of and premium, if any, or interest on the Bonds shall be
remitted to the Company.
(c) The Company shall receive a credit against its obligations to make any
payment of principal of and premium, if any, or interest on the First Mortgage
Bonds described in Section 4.09(b) hereof (whether at maturity, upon redemption
or otherwise), and such obligations
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shall be fully or partially, as the case may be, satisfied and discharged, in an
amount equal to the amount, if any, paid by the Company under Section 4.01
hereof, or otherwise satisfied or discharged, in respect of the principal of and
premium, if any, or interest on the Bonds; provided, however, that the Company
shall receive no such credit for any payment with respect to any Bond made by
the Provider. The obligations of the Company to make such payment of principal
of and premium, if any, or interest on the First Mortgage Bonds shall be deemed
to have been reduced by the amount of such credit.
(d) In view of the pledge and assignment of the First Mortgage Bonds in
accordance with Section 4.03 hereof, the Issuer agrees that if the Company's
obligation under Section 4.01 hereof to repay the loan made to it pursuant to
Section 3.03 hereof is secured by the First Mortgage Bonds, (i) the First
Mortgage Bonds shall be issued and delivered to, registered in the name of and
held by the Trustee (or, subject to Section 5.12 of the Indenture, the Trustee's
nominee) for the benefit of the Owners from time to time of the Bonds, and the
Company shall make all payments of principal of and premium, if any, and
interest on the First Mortgage Bonds to the Trustee as the registered owner
thereof; (ii) the Indenture shall provide that the Trustee shall not sell,
assign or transfer the First Mortgage Bonds except to a successor trustee under
the Indenture and shall surrender First Mortgage Bonds to the Company Mortgage
Trustee in accordance with the provisions of Section 4.09(e) and Section 4.09(f)
hereof; and (iii) the Company may take such actions as it shall deem to be
desirable to effect compliance with such restrictions on transfer, including the
placing of an appropriate legend on each First Mortgage Bond and the issuance of
stop-transfer instructions to the Company Mortgage Trustee or any other transfer
agent under the Company Mortgage.
(e) At the time any Bonds cease to be Outstanding (other than by reason of
the payment of First Mortgage Bonds or by reason of the payment of principal of
or interest on the Bonds by the Provider and other than those Bonds in lieu of
or in exchange or substitution for which other Bonds shall have been
authenticated and delivered), the Issuer shall cause the Trustee to surrender to
the Company Mortgage Trustee a corresponding principal amount of First Mortgage
Bonds.
(f) On any Business Day the Company may provide for the release of its
First Mortgage Bonds by delivering Substitute Collateral to the Trustee to
secure the obligation of the Company to repay the loan made to it pursuant to
Section 3.03 hereof, but only if the Company shall, on the date of delivery of
such Substitute Collateral, simultaneously deliver to the Trustee:
(i) a Favorable Opinion of Bond Counsel regarding the delivery of
such Substitute Collateral and release of the First Mortgage Bonds; and
(ii) written evidence from the Provider that it has reviewed the
proposed Substitute Collateral and finds the same to be acceptable.
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ARTICLE V
SPECIAL COVENANTS
SECTION 5.01. MAINTENANCE OF EXISTENCE; CONDITIONS UNDER WHICH EXCEPTIONS
PERMITTED. The Company shall maintain in good standing its corporate existence
as a corporation organized under the laws of one of the states of the United
States or the District of Columbia and will remain duly qualified to do business
in the State for so long as the Company has an ownership interest in the
Project, will not dissolve or otherwise dispose of all or substantially all of
its assets and will not consolidate with or merge into another corporation;
provided, however, that the Company may, without violating the foregoing,
undertake from time to time any one or more of the following, if, prior to the
effective date thereof, such action is approved by all public utility
commissions or similar entities that are required by law to approve such action
and there shall have been delivered to the Trustee a Favorable Opinion of Bond
Counsel with respect to the contemplated action:
(a) consolidate or merge with another corporation or sell or
otherwise transfer to another entity all or substantially all of its
assets as an entirety, provided the resulting, surviving or transferee
entity, as the case may be, shall be (i) the Company or (ii) an entity
qualified to do business in the State as a foreign corporation or
incorporated and existing under the laws of the State which shall have
assumed in writing all of the obligations of the Company hereunder and
under the First Mortgage Bonds and shall deliver to the Trustee an opinion
of counsel to the Company that such consolidation or merger complies with
the provisions of this Section 5.01; or
(b) convey all or substantially all of its assets to one or more
wholly-owned subsidiaries of the Company so long as the Company shall
remain in existence and primarily liable on all of its obligations
hereunder and the subsidiary or subsidiaries to which such assets shall be
so conveyed shall guarantee in writing the performance of all of the
Company's obligations hereunder and under the First Mortgage Bonds.
SECTION 5.02. PERMITS OR LICENSES. In the event that it may be necessary for
the proper performance of this Agreement on the part of the Company or the
Issuer that any application or applications for any permit or license to do or
to perform certain things be made to any governmental or other agency by the
Company or the Issuer, the Company and the Issuer each shall, upon the request
of either, execute such application or applications.
SECTION 5.03. ARBITRAGE COVENANT. The Issuer, to the extent it has any
control over proceeds of the Bonds, and the Company covenant and represent to
each other and to and for the benefit of the Beneficial Owners that so long as
any of the Bonds remain Outstanding, moneys on deposit in any fund in connection
with the Bonds, whether such moneys were derived from the proceeds of the sale
of the Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Code and any lawful regulations promulgated thereunder, as the same exist on
this date or may from time to time hereafter be amended, supplemented or
revised. The Company also covenants for the
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benefit of the Beneficial Owners to comply with all of the provisions of the Tax
Certificate. The Company reserves the right, however, to make any investment of
such moneys permitted by State law, if, when and to the extent that said Section
148 or regulations promulgated thereunder shall be repealed or relaxed or shall
be held void by final judgment of a court of competent jurisdiction, but only
upon receipt of a Favorable Opinion of Bond Counsel with respect to such
investment.
SECTION 5.04. FINANCING STATEMENTS. The Company shall, to the extent required
by law, file and record, refile and re-record, or cause to be filed and
recorded, refiled and re-recorded, all documents or notices, including the
financing statements and continuation statements, referred to in Section 5.05 of
the Indenture. The Issuer shall cooperate fully with the Company in taking any
such action. Concurrently with the execution and delivery of the Bonds, the
Company shall cause to be delivered to the Trustee the opinion of counsel
required pursuant to Section 5.05(a) of the Indenture.
SECTION 5.05. COVENANTS WITH RESPECT TO TAX-EXEMPT STATUS OF THE BONDS. The
Company covenants for the benefit of the Owners of the Bonds and the Issuer that
it (a) has not taken, and will not take or permit to be taken on its behalf, any
action which would adversely affect the Tax-Exempt status of the Bonds and (b)
will take, or require to be taken, such actions as may, from time to time, be
required under applicable law or regulation to continue to cause the Bonds to be
Tax-Exempt.
SECTION 5.06. INDEMNIFICATION OF ISSUER. (a) The Company agrees that the
Issuer, its elected or appointed officials, officers, agents, servants and
employees, shall not be liable for, and agrees that it will at all times
indemnify and hold free and harmless the Issuer, its elected or appointed
officials, officers, agents, servants and employees from and against, and pay
all expenses of the Issuer, its elected or appointed officials, officers,
agents, servants and employees relating to, (a) any lawsuit, proceeding or claim
arising in connection with the Project or this Agreement that results from any
action taken by or on behalf of the Issuer, its elected or appointed officials,
officers, agents, servants and employees pursuant to or in accordance with this
Agreement or the Indenture that may be occasioned by any cause whatsoever,
except the negligence or willful misconduct of the Issuer, its elected or
appointed officials, officers, agents, servants or employees, or (b) any
liability for any loss or damage to property or any injury to or death of any
person that may be occasioned by any cause whatsoever pertaining to the Project,
except the negligence or willful misconduct of the Issuer, its elected or
appointed officials, officers, agents, servants or employees. In case any action
shall be brought against the Issuer in respect of which indemnity may be sought
against the Company, the Issuer shall promptly notify the Company in writing and
the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Issuer and the payment of all expenses.
Failure by the Issuer to notify the Company shall not relieve the Company from
any liability which it may have to the Issuer otherwise than under this Section
5.06. The Issuer shall have the right to employ separate counsel in any such
action and participate in the defense thereof, such counsel shall be paid by the
Issuer unless the employment of such counsel has been authorized by the Company.
The Company shall not be liable for any settlement of any such action without
its consent, but if any such action is settled with the consent of the Company
or if there be final judgment for the plaintiff in any such action, the Company
agrees to indemnify and hold free and
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harmless the Issuer, its elected or appointed officials, officers, agents,
servants and employees from and against any loss or liability by reason of such
settlement or judgment. The Company will reimburse the Issuer, its elected or
appointed officials, officers, agents, servants and employees for any action
taken pursuant to Section 5.03 of the Indenture.
(b) The obligations of the Company under this Section 5.06 shall survive
the termination of this Agreement.
(c) It is the intention of the parties that the Issuer, its elected or
appointed officials, officers, agents, servants and employees shall not incur
any pecuniary liability by reason of the terms of this Agreement or the
Indenture, or the undertakings required of the Issuer hereunder or thereunder or
by reason of the issuance of the Bonds, the execution of the Indenture or the
performance of any act required of the Issuer by this Agreement or the Indenture
or requested of the Issuer by the Company.
SECTION 5.07. RECORDS OF COMPANY; MAINTENANCE AND OPERATION OF THE PROJECT.
(a) The Trustee and the Issuer shall be permitted at all reasonable times during
the term of this Agreement to examine the books and records of the Company with
respect to the Project; provided, however, that information and data contained
in the books and records of the Company shall be considered proprietary and
shall not be voluntarily disclosed by the Trustee or the Issuer except as
required by law.
(b) The Company shall cause the Project to be maintained in good repair
and shall cause the Project to be insured in accordance with standard industry
practice and shall pay all costs thereof. All proceeds of such insurance shall
be for the account of the Company.
(c) The Company shall be entitled to the proceeds of any condemnation
award or portion thereof made for damage to or taking of any of the Project or
other property of the Company.
(d) Anything in this Agreement to the contrary notwithstanding, the
Company shall have the right at any time to cause the operation of the Plant to
be terminated if the Company shall have determined or concurred in a
determination that the continued operation of the Plant is uneconomical for any
reason.
SECTION 5.08. RIGHT OF ACCESS TO THE PROJECT. The Company agrees that the
Issuer, the Trustee and their respective duly authorized agents shall have the
right, for so long as the Company has an ownership interest in the Project and
subject to such limitations, restrictions and requirements as the Company may
reasonably prescribe for plant security and safety reasons and in order to
preserve secret processes and formulae, at all reasonable times to enter upon
and to examine and inspect the Project; provided, however, nothing contained
herein shall entitle the Issuer or the Trustee to any information or inspection
involving confidential material of the Company. Information and data contained
in the books and records of the Company shall be considered proprietary and
shall not be voluntarily disclosed by the Issuer or the Trustee except as
required by law. In the event that the Company sells or otherwise transfers its
interest in the Project, the Company shall require the purchaser or transferee
of the Company's interest in the
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Project to agree that the Issuer, the Trustee and their respective duly
authorized agents shall have the same rights, and be subject to the same
limitations, as are provided in this Section with respect to the Project.
SECTION 5.09. REMARKETING AGENT. So long as any of the Bonds are subject to
optional or mandatory purchase pursuant to the provisions of the Indenture
(except during a Term Interest Rate Period that extends to the maturity of the
Bonds), the Company shall cause a Remarketing Agent to be appointed and acting
pursuant to a Remarketing Agreement at all such times as shall be necessary in
order to provide for the remarketing of the Bonds and the establishment of
interest rates to be borne by the Bonds in accordance with the provisions of the
Indenture.
SECTION 5.10. CREDIT RATINGS. The Company shall take all reasonable action
necessary to enable at least two nationally-recognized statistical rating
organizations (as that term is used in the rules and regulations of the
Securities and Exchange Commission under the Securities Exchange Act) to provide
credit ratings for the PARS Rate Bonds.
SECTION 5.11. PURCHASES OF PARS RATE BONDS. The Company shall not purchase or
otherwise acquire PARS Rate Bonds unless the Company redeems or cancels such
PARS Rate Bonds on the day of any such purchase.
SECTION 5.12. CREDIT FACILITY. Concurrently with the initial authentication
and delivery of the Bonds, the Company shall cause the original Credit Facility
to be delivered to the Trustee. Under the Credit Facility, the Provider shall
guarantee the payment of the principal of the Bonds upon the stated maturity
thereof and upon the mandatory redemption of the Bonds pursuant to Section 4.03
of the Indenture and the payment of the interest on the Bonds as the same
accrues and becomes due and payable. The Issuer and the Company agree to be
bound by the provisions of the Indenture pertaining to the Credit Facility.
ARTICLE VI
ASSIGNMENT
SECTION 6.01. CONDITIONS. The Company's interest in this Agreement may be
assigned in whole or in part by the Company: (a) to another entity, subject,
however, to the conditions that such assignment shall not relieve (other than as
described in Section 5.01(a)(ii) hereof) the Company from primary liability for
its obligations to pay the First Mortgage Bonds or to make the Loan Payments or
to make payments to the Trustee under Section 4.02 hereof or for any other of
its obligations hereunder, or (b) to an Affiliate in connection with the
conveyance of the Plant to such Affiliate, subject, however, to the conditions
that (i) such Affiliate is an entity described in Section 5.01(a)(ii) hereof (in
which case the Company shall be relieved of all obligations hereunder and under
the First Mortgage Bonds); (ii) such conveyance is approved by any public
utility commissions or similar entities that are required by law to approve such
conveyance; and (iii) the Company shall have delivered to the Trustee (A) an
opinion of counsel to the Company that such assignment complies with the
provisions of this Section 6.01 and (B) a Favorable Opinion of Bond Counsel with
respect to such assignment.
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SECTION 6.02. DOCUMENTS FURNISHED TO TRUSTEE. The Company shall, within 30
days after the delivery thereof, furnish to the Issuer and the Trustee a true
and complete copy of the agreements or other documents effectuating any
assignment pursuant to Section 6.01 hereof. The Trustee's only duties with
respect to any such agreement or other document so furnished to it shall be to
make the same available for examination by any Owner at the Principal Office of
the Trustee upon reasonable notice.
SECTION 6.03. LIMITATION. This Agreement shall not be assigned in whole or in
part, except as provided in this Article VI or in Section 4.03 or Section 5.01
hereof.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. EVENTS OF DEFAULT. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) a failure by the Company to make when due any Loan Payment or
any payment required under Section 4.01 or Section 4.02 hereof or on the
First Mortgage Bonds, which failure shall have resulted in an "Event of
Default" under Section 9.01(a), Section 9.01(b) or Section 9.01(c) of the
Indenture;
(b) a failure by the Company to pay when due any amount required to
be paid under this Agreement or to observe and perform any covenant,
condition or agreement on its part to be observed or performed under this
Agreement (other than a failure described in Section 7.01(a) above), which
failure shall continue for a period of 90 days (or such longer period as
the Issuer and the Trustee may agree to in writing) after written notice,
specifying such failure and requesting that it be remedied, shall have
been given to the Company by the Trustee or to the Company and the Trustee
by the Issuer; provided, however, that if such failure is other than for
the payment of money and is of such nature that it cannot be corrected
within the applicable period, such failure shall not constitute an "Event
of Default" so long as the Company institutes corrective action within the
applicable period and such action is being diligently pursued;
(c) the dissolution or liquidation of the Company; or the filing by
the Company of a voluntary petition in bankruptcy; or failure by the
Company promptly to lift or bond any execution, garnishment or attachment
of such consequence as will impair its ability to make any payments under
this Agreement or on the First Mortgage Bonds; or the filing of a petition
or answer proposing the entry of an order for relief by a court of
competent jurisdiction against the Company under Title 11 of the United
States Code, as the same may from time to time be hereafter amended, or
proposing the reorganization, arrangement or debt readjustment of the
Company under the provisions of any bankruptcy act or under any similar
act which may be hereafter enacted and the failure of said petition or
answer to be discharged or denied within ninety (90) days after the filing
thereof or the entry of an order for relief by a court of competent
jurisdiction in any
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proceeding for its liquidation or reorganization under the provisions of
any bankruptcy act or under any similar act which may be hereafter
enacted; or an assignment by the Company for the benefit of its creditors;
or the entry by the Company into an agreement of composition with its
creditors (the term "dissolution or liquidation of the Company," as used
in this subsection (c), shall not be construed to include the cessation of
the corporate existence of the Company resulting either from a merger or
consolidation of the Company into or with another corporation or a
dissolution or liquidation of the Company following a transfer of all or
substantially all its assets as an entirety, under the conditions
permitting such actions contained in Section 5.01 hereto; or
(d) receipt by the Trustee of written notice from Ambac that an
Event of Default has occurred under the initial Credit Facility Agreement
or the occurrence of an event described in any subsequent Credit Facility
Agreement that is designated therein as giving rise to an Event of Default
hereunder.
SECTION 7.02. FORCE MAJEURE. The provisions of Section 7.01(b) hereof are
subject to the following limitations: if by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States or the State, or any department,
agency, political subdivision, court or official of any of such State or any
other state which asserts regulatory jurisdiction over the Company; orders of
any kind of civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes;
storms; floods; washouts; droughts; arrests; restraint of government and people;
civil disturbances; explosions; breakage or accident to machinery; partial or
entire failure of utilities; or any cause or event not reasonably within the
control of the Company, the Company is unable in whole or in part to carry out
any one or more of its agreements or obligations contained herein, other than
its obligations under Section 4.01, Section 4.02, Section 4.04, Section 4.05,
Section 4.06, Section 5.01 and Section 5.06 hereof and on the First Mortgage
Bonds, the Company shall not be deemed in default by reason of not carrying out
said agreement or agreements or performing said obligation or obligations during
the continuance of such inability. The Company shall make reasonable effort to
remedy with all reasonable dispatch the cause or causes preventing it from
carrying out its agreements, provided that the settlement of strikes, lockouts
and other industrial disturbances shall be entirely within the discretion of the
Company, and the Company shall not be required to make settlement of strikes,
lockouts and other industrial disturbances by acceding to the demands of the
opposing party or parties when such course is in the judgment of the Company
unfavorable to the Company except to the extent the Company's ability to pay
when due any amount due on the First Mortgage Bonds will be jeopardized by the
Company's failure to make such a settlement.
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SECTION 7.03. REMEDIES. (a) Upon the occurrence and continuance of any Event
of Default described in Section 7.01(a) or Section 7.01(c) hereof, and further
upon the condition that, in accordance with the terms of the Indenture, the
Bonds shall have been declared to be immediately due and payable pursuant to any
provision of the Indenture, the Loan Payments shall without further action,
become and be immediately due and payable.
(b) Any waiver of any "Event of Default" under the Indenture and a
rescission and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Agreement and a rescission
and annulment of the consequences thereof.
(c) Upon the occurrence and continuance of any Event of Default, the
Issuer may take any action at law or in equity to collect any payments then due
and thereafter to become due hereunder or to seek injunctive relief or specific
performance of any obligation, agreement or covenant of the Company hereunder
and under the First Mortgage Bonds.
(d) Any amounts collected from the Company pursuant to this Section 7.03
shall be applied in accordance with the Indenture. No action taken pursuant to
this Section 7.03 shall relieve the Company from the Company's obligations
pursuant to Section 4.01 or Section 4.02 hereof.
(e) Upon the occurrence and continuance of any Event of Default under
Section 9.01(f) of the Indenture, the Trustee, as the holder of the First
Mortgage Bonds, shall, subject to the provisions of the Indenture, have the
rights provided in the Company Mortgage. Any waiver made in accordance with the
Indenture of a "Completed Default" under the Company Mortgage and a rescission
and annulment of its consequences shall constitute a waiver of the corresponding
Event or Events of Default hereunder and a rescission and annulment of the
consequences thereof.
SECTION 7.04. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved to
the Issuer hereby is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer to exercise any remedy reserved to it in this Article VII, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required.
SECTION 7.05. REIMBURSEMENT OF ATTORNEYS' FEES. If the Company shall default
under any of the provisions hereof and the Issuer or the Trustee shall employ
attorneys or incur other reasonable and proper expenses for the collection of
payments due hereunder or on the First Mortgage Bonds or for the enforcement of
performance or observance of any obligation or agreement on the part of the
Company contained herein, the Company will on demand therefor reimburse the
Issuer or the Trustee, as the case may be, for the reasonable and proper fees of
such attorneys and such other reasonable and proper expenses so incurred.
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SECTION 7.06. WAIVER OF BREACH. In the event any obligation created hereby
shall be breached by either of the parties hereto and such breach shall
thereafter be waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. In view of the assignment of certain of the Issuer's rights and
interest hereunder to the Trustee, the Issuer shall have no power to waive any
Event of Default hereunder by the Company in respect of such rights and interest
without the consent of the Trustee, and the Trustee may exercise any of the
rights of the Issuer hereunder.
ARTICLE VIII
PURCHASE OR REDEMPTION OF BONDS
SECTION 8.01. REDEMPTION OF BONDS. The Issuer shall take or cause to be taken
the actions required by the Indenture (other than the payment of money) to
discharge the lien thereof through the redemption, or provision for payment or
redemption, of all Bonds then Outstanding, or to effect the redemption, or
provision for payment or redemption, of less than all the Bonds then
Outstanding, upon receipt by the Issuer and the Trustee from an Authorized
Company Representative of a written notice designating the principal amount of
the Bonds to be redeemed and specifying the date of redemption (which, unless
waived by the Issuer and the Trustee, shall not be less than 30 days from the
date such notice is given, or such shorter period as the Trustee and the Company
may agree from time to time) and the applicable redemption provision of the
Indenture. Unless otherwise stated therein and except with respect to a
redemption under Section 4.03 of the Indenture, such notice shall be revocable
by the Company at any time prior to the time at which the Bonds to be redeemed,
or for the payment or redemption of which provision is to be made, are first
deemed to be paid in accordance with Article VIII of the Indenture. The Company
shall furnish any moneys required by the Indenture to be deposited with the
Trustee or otherwise paid by the Issuer in connection with any of the foregoing
purposes. In connection with any redemption of the Bonds, the Company shall
provide to the Trustee the names and addresses of the Securities Depositories
and Information Services as contemplated by Section 4.05 of the Indenture.
SECTION 8.02. PURCHASE OF BONDS. The Company may at any time, and from time
to time, furnish moneys to the Trustee accompanied by a notice directing such
moneys to be applied to the purchase of Bonds in accordance with the provisions
of the Indenture delivered pursuant to the Indenture, which Bonds shall, at the
direction of the Company, be delivered in accordance with Section 3.06(a)(ii) of
the Indenture.
SECTION 8.03. OBLIGATION TO PREPAY. (a) The Company shall be obligated to
prepay in whole or in part the amounts payable hereunder upon a Determination of
Taxability (as defined below) giving rise to a mandatory redemption of the Bonds
pursuant to Section 4.03 of the Indenture, by paying an amount equal to, when
added to other funds on deposit in the Bond Fund, the aggregate principal amount
of the Bonds to be redeemed pursuant to the Indenture plus accrued interest to
the redemption date.
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(b) The Company shall cause a mandatory redemption to occur within 180
days after a Determination of Taxability (as defined below) shall have occurred.
A "Determination of Taxability" shall be deemed to have occurred if, as a result
of the failure of the Company to observe any covenant, agreement or
representation in this Agreement, a final decree or judgment of any federal
court or a final action of the Internal Revenue Service determines that interest
paid or payable on any Bond is or was includible in the gross income of an Owner
of the Bonds for federal income tax purposes under the Code (other than an Owner
who is a "substantial user" or "related person" within the meaning of Section
103(b)(13) of the 1954 Code). However, no such decree or action will be
considered final for this purpose unless the Company has been given written
notice of the same, either directly or in the name of any Owner of a Bond, and,
if it so desires and is legally allowed, has been afforded the opportunity to
contest the same, either directly or in the name of any Owner of a Bond, and
until conclusion of any appellate review, if sought. If the Trustee receives
written notice from any Owner of a Bond stating (a) that the Owner has been
notified in writing by the Internal Revenue Service that it proposes to include
the interest on any Bond in the gross income of such Owner for the reasons
described therein or any other proceeding has been instituted against such Owner
which may lead to a final decree or action as described herein, and (b) that
such Owner will afford the Company the opportunity to contest the same, either
directly or in the name of the Owner, until a conclusion of any appellate
review, if sought, then the Trustee shall promptly give notice thereof to the
Company, the Issuer, the Provider and the Owner of each Bond then Outstanding.
If a final decree or action as described above thereafter occurs and the Trustee
has received written notice thereof as provided in Section 8.01 hereof at least
45 days prior to the redemption date, the Trustee shall request prepayment from
the Company of the amounts payable hereunder and give notice of the redemption
of the Bonds at the earliest practical date, but not later than the date
specified in this Article, and in the manner provided by Section 4.05 of the
Indenture.
At the time of any such prepayment of the amounts payable hereunder
pursuant to this Section, the prepayment amount shall be applied, together with
other available moneys in the Bond Fund, to the redemption of the Bonds on the
date specified in the notice as provided in the Indenture, whether or not such
date is an Interest Payment Date, to the Trustee's fees and expenses under the
Indenture accrued to such redemption of the Bonds, and to all sums due to the
Issuer under this Agreement.
Whenever the Company shall have given any notice of prepayment of the
amounts payable hereunder pursuant to this Article VIII, which includes a notice
for redemption of the Bonds pursuant to the Indenture, all amounts payable under
the first paragraph of this Section 8.03 shall become due and payable on the
date fixed for redemption of such Bonds.
SECTION 8.04. COMPLIANCE WITH INDENTURE. Anything in this Agreement to the
contrary notwithstanding, the Issuer and the Company shall take all actions
required by this Agreement and the Indenture in order to comply with the
provisions of Articles III and IV of the Indenture.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. TERM OF AGREEMENT. This Agreement shall remain in full force
and effect from the date of delivery hereof until the right, title and interest
of the Trustee in and to the Trust Estate shall have ceased, terminated and
become void in accordance with Article VIII of the Indenture and until all
payments required under this Agreement shall have been made. The date first
above written shall be for identification purposes only and shall not be
construed to imply that this Agreement was executed on such date.
SECTION 9.02. NOTICES. Except as otherwise provided in this Agreement, all
notices, certificates, requests, requisitions and other communications hereunder
shall be in writing and shall be sufficiently given and shall be deemed given
when mailed by Mail or by certified or registered mail postage prepaid, or by
overnight delivery service, addressed as follows (and, if by overnight delivery
service and required by the chosen delivery service, with then-current telephone
number of the addressee): if to the Issuer, at Xxxx Xxxx, Xxxxxxx, Xxxxxxx
00000, Attention: Mayor; if to the Company, at 0000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Treasurer; if to the Trustee, at such
address as shall be designated by it in or pursuant to the Indenture; if to the
Auction Agent, if any, at such address as shall be designated by such party
pursuant to the Auction Agreement; if to the Provider of the Credit Facility, at
such address as shall be designated by it in or pursuant to the Indenture; and
if to the Remarketing Agent, if any, at such address as shall be designated by
such party pursuant to the Remarketing Agreement. A copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Company, the Trustee, the Auction Agent, the Provider and the Remarketing Agent
shall also be given to the others. Any of the foregoing parties may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other communications shall be
sent.
SECTION 9.03. PARTIES IN INTEREST. (a) This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, and no other person, firm or corporation
shall have any right, remedy or claim under or by reason of this Agreement
except for rights of payment and indemnification hereunder of the Trustee and
the Registrar. Section 9.05 hereof to the contrary notwithstanding, for purposes
of perfecting a security interest in this Agreement by the Trustee, only the
counterpart delivered, pledged and assigned to the Trustee shall be deemed the
original. No security interest in this Agreement may be created by the transfer
of any counterpart thereof other than the original counterpart delivered,
pledged and assigned to the Trustee.
(b) At any time when the Company's obligation under Section 4.01 hereof to
repay the loan made to it pursuant to Section 3.03 hereof is not secured by
First Mortgage Bonds, references to the First Mortgage Bonds, the Company
Mortgage or the Company Mortgage Trustee shall be ineffective.
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SECTION 9.04. AMENDMENTS. This Agreement may be amended only by written
agreement of the Company and the Issuer and with the written consent of the
Trustee in accordance with the provisions of Section 12.05 or 12.06 of the
Indenture, as applicable; provided, however, that Exhibit A to this Agreement
may be amended upon compliance only with the requirements of Section 3.04
hereof.
SECTION 9.05. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original (except as expressly provided in Section 9.03 hereof), and such
counterparts shall together constitute but one and the same Agreement.
SECTION 9.06. SEVERABILITY. If any clause, provision or Section of this
Agreement shall, for any reason, be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
SECTION 9.07. GOVERNING LAW. This Agreement shall be governed exclusively by
and construed in accordance with the laws of the State.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CITY OF FORSYTH, MONTANA
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Mayor Pro-Tem
[SEAL]
ATTEST:
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
City Clerk
AVISTA CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Vice President & Treasurer
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EXHIBIT A
PROJECT DESCRIPTION
1. POLLUTION CONTROL EQUIPMENT
SCRUBBER SYSTEM
The air pollution control facilities employed on Units #3 and #4 consist
of a complete scrubber system, including duct work, plenums, scrubber vessels,
reheaters and induced draft fans, together with infrastructures, monitoring and
electrical controls and instrumentation therefore, for the purpose of removing
the sulfur dioxide (SO(2)) and particulate matter from the flue gas. The
scrubber system also includes a scrubber maintenance facility, including a
machine shop and laboratory dedicated to the scrubber system and an
environmental monitoring laboratory for the pollution control facilities. The
scrubber system utilizes the Wet Venturi Principle and consists of eight modules
for each unit through which the steam generator gases from the burned coal must
pass.
The gases in the scrubber are contacted with finely atomized scrubber
slurry. Within the stated performance of the system, fly ash particulates are
removed by the slurry droplets. The sulfur dioxide reacts with the alkali
contained in the slurry which results from the mixing of water, fly ash
particulates, hydrated high calcium lime and hydrated dolomitic lime. A major
portion of the sulfur dioxide is converted to solid sulfate compounds which are
retained in the scrubber liquid and can, therefore, be piped to and deposited in
an ash pond together with the particulate.
After the flue gas passes through the venturi section, absorption sprays
and wash trays, it is processed through a demister which removes any entrained
slurry and is then reheated and discharged through the stack.
The slurry system in the Units #3 and #4 scrubber system consists of
recycle tanks, regenerators, agitators, pumps and pipelines. The slurry from the
Units #3 and #4 scrubber system is transported to an effluent holding pond and
involves the use of effluent holding tanks, agitators, pumps and pipelines. A
separate wash tray pond system is used to store the suspended solids collected
from the wash tray system. Reclaimed water from the clear water section of these
ponds is circulated back to the scrubber system.
LIME STORAGE
The sole purpose of the lime system is to supply the lie slurry
requirements of the scrubber regeneration system. There is one lime system that
serves the sixteen scrubbers for Units #3 and #4. Major components of the system
include four slakers, in which calcined high calcium lime is reacted with water
to produce a hydrated lime slurry, slurry transfer tanks, where the slurry is
diluted with water and mixed with dry hydrated dolomitic lime, slurry feed
storage
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tanks, where the slurry will be held for use by the regenerators as needed,
hydrators, for mixing calcined dolomitic lime with water, and agitators.
SCRUBBER SLUDGE DISPOSAL
Effluent slurry is pumped from the plant to the sludge disposal pond
located approximately three miles southeast of the plant. The suspended solids
settle to the pond bottom and the clear water is pumped back to the plant.
There are two phases in the development of this pond. The first phase
requires the construction of one dam 108 feet high and 1,100 feet in length. A
saddle dam must also be added. The saddle dam will vary in height with a maximum
height for this phase of 36 feet and be approximately 2,800 feet in length. The
capacity of Phase 1 will be 6,650 acre-feet and it will last approximately 10
years.
The development of the second phase will require that the original dam be
raised to 138 feet in height and increased to a length of 2,500 feet. The saddle
dam will be raised to a maximum height of 66 feet and a total length of 3,500
feet. The capacity of the second phase will be an additional 7,000 acre-feet and
it will last approximately 12 years, for a total life of 22 years. The
construction of the second phase is not included in cost reported at this time.
The sludge disposal pond design takes into account a permit requirement
for minimum seepage, by providing low permeability plastic concrete filled
trenches around the periphery of the pond constructed during the course of Phase
1 work.
COAL DUST CONTROL SYSTEM
The coal dust control system is designed to collect, store and treat coal
dust resulting from mining, crushing, handling and storing coal in the course of
normal Units #3 and #4 operations. To control coal dust air pollution the points
where coal is transferred between conveyors or placed in coal piles have been
enclosed. The coal transfer stations between conveyors are enclosed with steel
framed structures with metal siding. The structures are equipped with vacuum
filtration systems, consisting of ducts, blowers, dust removal filters and
associated equipment, to remove coal dust from exhaust air from the structures,
and are also equipped with mechanical dust collectors. The main line 45,000 ton
coal storage pile is enclosed with a 340' long A-frame precast panel concrete
structure designed to contain coal dust, thereby allowing its removal and
treatment.
COOLING TOWER DRIFT CONTAINMENT CONTROL FACILITY
Operation of the cooling towers produces exhaust air emissions containing
circulating water, particulates and other pollutants generally known as cooling
tower drift. To control release of these air pollutants, the cooling towers are
provided with high efficiency drift eliminators, located at the top of the
cooling tower structures, which remove drift from the cooling tower exhaust air.
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2. SOLID WASTE DISPOSAL
BOTTOM ASH DISPOSAL
The function of the bottom ash disposal system is to remove accumulations
of furnace bottom ash, pulverizer pyrites, economizer ash, and air preheater fly
ash by means of a water-ash slurry to a disposal pond located approximately
2,000 feet southeast of the plant site. The system consists generally of three
sets of fly ash hoppers, (economizer, air heater, and flue gas duct hoppers)
pyrite hoppers, the bottom ash xxxxxx, and 18,000 gallon transfer tank, a
settling pond, a clear water pond and various pumps, and pipelines.
Clinker grinders are used to grind the bottom ash which is then mixed with
water and sluiced to the ash transfer tank.
The economizer ash collected in economizer hoppers falls by gravity to the
ash transfer tank.
The pyrites are collected in local tanks and sluiced to the ash transfer
tank.
Ash collected in the flue gas duct hoppers and air preheater hoppers is
sluiced to the ash transfer tank.
These ashes are pumped from the ash transfer tank to the bottom ash pond.
Reclaimed water is returned from the bottom ash disposal pond and redistributed
to the various sections of the bottom ash disposal system.
The solid waste disposal facilities for purposes of the issuance of the
Bonds include only so much of the bottom ash disposal system as is external to
the plant building and include piping from the building to the settling pond,
the pond itself, return water pumps and lines, a clear water pond and piping
back to the plant building.
3. WATER POLLUTION CONTROL
NORTH PLANT SEDIMENT POND
The north plant sediment pond is designed to collect and store the storm
runoff from the general north plant area. These waters are retained in the pond,
allowing natural evaporation to desiccate the pond. This prevents high
quantities of suspended solids from being discharged to Armells Creek or other
state surface waters.
NORTH PLANT AREA DRAINAGE SYSTEM
The north plant area drainage system is designed to collect and store
storm runoff from the water treatment building, fuel oil handling area and the
cooling tower area in the north plant area drain pond. The pond also serves as a
storage facility for one cooling tower basin drain,
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cooling tower overflow, water treatment filter backwash, and for the cooling
tower blowdown water not used in the flue gas scrubbing process. These waters
are potentially contaminated with oil and high suspended and dissolved solids,
and this system stores these discharges preventing any discharge to Armells
Creek or other state surface waters. The north plant area drainage system
consists of collection basins, piping, concrete culverts, yard drains, manholes
and special yard gradings (berms) which route these discharges to the north
plant area sump and north plant area drain pond. The north plant area drain pond
incorporates a hypalon liner to comply with a permit requirement for minimum
seepage. The oil separator section of the sump receives oily surface collection
drains. The oil and water are separated. The oil from the sump is then trucked
away for disposal.
The water discharges are either pumped to the scrubber effluent holding
pond via a 6" diameter pipeline, 19,000 feet in length for evaporation, to the
circulating water system, or the plant oily waste sump as appropriate. Each
discharge arrangement has its own set of sump pumps. The pumps and piping system
which discharge to the plant oily waste sump are not included in the costs
covered by this Report, nor is the circulating water system. The waters
recovered are excess to any plant requirements and recovery of the waters does
not provide any economic benefit to the plant.
CHEMICAL AND OILY WASTE SYSTEM
The chemical and oily waste system is designed to collect, store, treat
and dispose of chemical and oily wastes resulting from the normal operation of
Units #3 and #4. This system consists of drains and pipes, oil separators,
chemical waste sumps, chemical waste neutralizing tanks, neutralizing chemical
storage tanks, chemical inspection equipment, and associated mechanical and
electrical control equipment.
The chemical waste drainage system includes drains and neutralization
tanks for collection and treatment of chemical waste Chemical waste drains are
located throughout Units #3 and #4, and are used to collect and transfer
chemical waste to holding sumps and neutralization tanks. The neutralization
equipment includes chemical storage and injection equipment as well as controls
and instrumentation.
The oily waste drainage system is made up of a network of drains which
collect oily waste from throughout Units #3 and #4, and dispose of the wastes in
the Units #3 and #4 main water-oil sump. Oil separation xxxxxxxx in the sump
allow for oil removal. The treated water is monitored for trace oil levels and
released. After separation, the waste oil is removed by a contractor to an
offsite disposal area.
COOLING TOWER BLOWDOWN SYSTEM
The cooling tower blowdown system consists of a 6" pipeline from the
cooling tower to the waste disposal pond where the blowdown is treated by
settlement and evaporation in accordance with water pollution control
requirements.
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GROUNDWATER MONITORING XXXXX
Groundwater monitoring xxxxx have been installed around the various ponds
associated with the plant operation. These ponds include the scrubber effluent
holding pond, the scrubber drain pond, the scrubber wash tray pond, the bottom
ash pond, and the north plant area effluent pond. These groundwater monitoring
xxxxx provide the ability through sampling to detect and quantify accidental
discharges from the above mentioned plant storage and waste ponds. This is
necessary to show compliance with State Groundwater Standards and with permit
requirements for minimum seepage.
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