PARTICIPATION AGREEMENT
Dated as of February 29, 1996
among
OLD DOMINION ELECTRIC COOPERATIVE,
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except
as expressly provided herein, but
solely as Owner Trustee
FIRST UNION NATIONAL BANK OF FLORIDA
and
UTRECHT-AMERICA FINANCE CO.
Clover Unit 1 Generating Facility
and
Common Facilities
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION
AGREEMENT..................................................................................... 1
SECTION 1.1. DEFINITIONS................................................................ 1
SECTION 1.2. DIRECTLY OR INDIRECTLY..................................................... 2
SECTION 2. PARTICIPATION; CLOSING DATE; TRANSACTION COSTS................................................ 2
SECTION 2.1. AGREEMENTS TO PARTICIPATE.................................................. 2
SECTION 2.2. CLOSING DATE; PROCEDURE FOR PARTICIPATION.................................. 3
SECTION 2.3. OWNER PARTICIPANT'S INSTRUCTIONS TO THE OWNER TRUSTEE...................... 4
SECTION 2.4. TRANSACTION COSTS.......................................................... 5
SECTION 3. REPRESENTATIONS, WARRANTIES AND CERTAIN
AGREEMENTS.................................................................................... 5
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE AND
THE TRUST COMPANY.......................................................... 5
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE OWNER
PARTICIPANT................................................................ 7
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF OLD DOMINION............................. 8
SECTION 3.4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH
LENDER..................................................................... 13
SECTION 3.5. REPRESENTATIONS AND WARRANTIES OF THE AGENT................................ 14
SECTION 4. CLOSING CONDITIONS............................................................................ 14
SECTION 4.1. OPERATIVE DOCUMENTS........................................................ 14
SECTION 4.2. EQUITY INVESTMENT; LOANS................................................... 15
SECTION 4.3. PLEDGED COLLATERAL......................................................... 15
SECTION 4.4. DEPOSIT.................................................................... 15
SECTION 4.5. RESERVED................................................................... 15
SECTION 4.6. RESERVED................................................................... 15
SECTION 4.7. CERTIFIED COPIES........................................................... 15
SECTION 4.8. CORPORATE DOCUMENTS........................................................ 15
SECTION 4.9. NO DEFAULTS................................................................ 15
SECTION 4.10. NO THREATENED PROCEEDINGS.................................................. 15
SECTION 4.11. CONSENTS................................................................... 16
SECTION 4.12. GOVERNMENTAL ACTIONS....................................................... 16
SECTION 4.13. INSURANCE.................................................................. 16
SECTION 4.14. ENGINEERING REPORT......................................................... 16
SECTION 4.15. SURVEY..................................................................... 16
SECTION 4.16. APPRAISAL.................................................................. 17
SECTION 4.17. INVESTMENT BANKING OPINION................................................. 17
SECTION 4.18. OPINION WITH RESPECT TO CERTAIN TAX ASPECTS................................ 17
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SECTION 4.19. OPINION OF COUNSEL......................................................... 17
SECTION 4.20. RECORDINGS AND FILINGS..................................................... 17
SECTION 4.21. LETTER AS TO OFFEREES...................................................... 17
SECTION 5. CERTAIN COVENANTS OF THE OWNER PARTICIPANT.................................................... 18
SECTION 5.1. RESTRICTIONS ON TRANSFER OF BENEFICIAL INTEREST............................ 18
SECTION 5.2. OWNER PARTICIPANT'S LIENS.................................................. 19
SECTION 5.3. AMENDMENTS OR REVOCATION OF TRUST AGREEMENT................................ 19
SECTION 5.4. TRUST ESTATE............................................................... 19
SECTION 5.5. APPOINTMENT OF SUCCESSOR OWNER TRUSTEE OR CO-TRUSTEES...................... 19
SECTION 6. COVENANTS OF THE TRUST COMPANY AND THE OWNER
TRUSTEE....................................................................................... 20
SECTION 6.1. COMPLIANCE WITH THE TRUST AGREEMENT........................................ 20
SECTION 6.2. LESSOR'S LIENS............................................................. 20
SECTION 6.3. AMENDMENTS TO OPERATIVE DOCUMENTS.......................................... 20
SECTION 6.4. TRANSFER OF THE LESSOR'S UNIT 1 INTEREST................................... 20
SECTION 6.5. TRUST ESTATE............................................................... 20
SECTION 6.6. LIMITATION ON INDEBTEDNESS AND ACTIONS..................................... 20
SECTION 6.7. CHANGE OF LOCATION......................................................... 21
SECTION 7. COVENANTS OF OLD DOMINION..................................................................... 21
SECTION 7.1. MAINTENANCE OF CORPORATE EXISTENCE......................................... 21
SECTION 7.2. MERGER, CONSOLIDATION, SALE OF ASSETS...................................... 21
SECTION 7.3. NOTICE OF CHANGE IN ADDRESS OR NAME........................................ 22
SECTION 7.4. EXERCISE OF EARLY PURCHASE OPTION UNDER POLLUTION
CONTROL ASSETS LEASE....................................................... 22
SECTION 7.5. DELIVERY OF FINANCIAL STATEMENTS AND NO DEFAULT
CERTIFICATE................................................................ 22
SECTION 7.6. QUALIFYING SECURITY. ...................................................... 23
SECTION 7.7. QUALIFYING LETTER OF CREDIT................................................ 23
SECTION 7.8. INFORMATION CONCERNING CLOVER UNIT 1. .................................... 24
SECTION 7.9. FURTHER ASSURANCES......................................................... 24
SECTION 7.10. POLLUTION CONTROL ASSETS LEASE............................................. 24
SECTION 7.11. LOAN CERTIFICATES.......................................................... 24
SECTION 7.12. TAX TREATMENT OF BASIC RENT AND FOUNDATION BASIC RENT...................... 25
SECTION 8. OLD DOMINION'S INDEMNIFICATIONS............................................................... 25
SECTION 8.1. GENERAL INDEMNITY.......................................................... 25
SECTION 8.2. GENERAL TAX INDEMNITY...................................................... 30
SECTION 8.3. SURVIVAL................................................................... 39
SECTION 9. OLD DOMINION'S RIGHT OF QUIET ENJOYMENT....................................................... 39
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SECTION 10. SUPPLEMENTAL FINANCING; LOAN PREPAYMENTS AND
REFINANCINGS......................................................................... 39
SECTION 10.1. FINANCING NONSEVERABLE MODIFICATIONS....................................... 39
SECTION 10.2. MANDATORY PREPAYMENT OF SERIES B LOAN CERTIFICATE;
ADDITIONAL LOAN CERTIFICATES TO REFINANCE MANDATORY
PREPAYMENT OF SERIES B LOAN CERTIFICATE.................................... 41
SECTION 10.3. OPTIONAL REFINANCING....................................................... 43
SECTION 10.4. REFINANCING COSTS.......................................................... 43
SECTION 11. CONVEYANCE OF TITLE TO RETAINED ASSETS........................................................ 43
SECTION 11A. SUBSTITUTE SECURITY FOR PAYMENT UNDERTAKING
AGREEMENT..................................................................................... 45
SECTION 12. MISCELLANEOUS................................................................................. 46
SECTION 12.1. CONSENTS................................................................... 46
SECTION 12.2. BANKRUPTCY OF TRUST ESTATE................................................. 46
SECTION 12.3. AMENDMENTS AND WAIVERS..................................................... 46
SECTION 12.4. NOTICES.................................................................... 46
SECTION 12.5. SURVIVAL................................................................... 48
SECTION 12.6. SUCCESSORS AND ASSIGNS..................................................... 48
SECTION 12.7. BUSINESS DAY............................................................... 48
SECTION 12.8. GOVERNING LAW.............................................................. 48
SECTION 12.9. SEVERABILITY............................................................... 49
SECTION 12.10. COUNTERPARTS............................................................... 49
SECTION 12.11. HEADINGS AND TABLE OF CONTENTS............................................. 49
SECTION 12.12. LIMITATIONS OF LIABILITY................................................... 49
SECTION 12.13. CONSENT TO JURISDICTION.................................................... 50
SECTION 12.14. FURTHER ASSURANCES......................................................... 50
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Attachments to Participation Agreement:
Appendix A - Definitions
Schedule 1 - Transaction Costs
Schedule 2 - Recordings and Filings
Exhibit A - Form of Trust Agreement
Exhibit B - Form of Equipment Head Lease
Exhibit C - Form of Foundation Head Lease
Exhibit D - Form of Option Agreement
Exhibit E - Form of Clover Agreements Assignment
Exhibit F - Form of Equipment Operating Lease
Exhibit G - Form of Foundation Operating Lease
Exhibit H - Form of Loan Agreement
Exhibit I - Form of Leasehold Mortgage
Exhibit J - Form of Pledge Agreement
Exhibit K - Form of Deposit Agreement
Exhibit L - Form of Deposit Pledge Agreement
Exhibit M - Form of Tax Indemnity Agreement
Exhibit N - Form of Second Severance Agreement
Exhibit O - Form of Assumption Agreement
Exhibit P - Form of Guaranty
Exhibit Q - Form of Payment Undertaking Agreement
Exhibit R - Form of Payment Undertaking Pledge Agreement
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PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT, dated as of February 29, 1996 (this
"Participation Agreement" or this "Agreement"), among (i) OLD DOMINION ELECTRIC
COOPERATIVE, a wholesale power supply cooperative organized under the laws of
the Commonwealth of Virginia (herein together with its successors and assigns,
called "Old Dominion"), (ii) STATE STREET BANK AND TRUST COMPANY, a
state-chartered trust company organized and existing under the laws of the
Commonwealth of Massachusetts, not in its individual capacity, except as
expressly provided herein, but solely as trustee under the Trust Agreement (as
hereinafter defined) (herein in such capacity, together with its successors and
assigns, called the "Owner Trustee" and herein in its individual capacity,
together with its successors and assigns, called the "Trust Company"), (iii)
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, as Owner
Participant (herein in such capacity, together with its successors and assigns,
called the "Owner Participant"), and (iv) UTRECHT-AMERICA FINANCE CO., a
Delaware corporation, as Lender (herein in such capacity, together with its
successors and assigns, called the "Original Lenders") and as Agent for the
Lenders (herein in such capacity, together with its successors and assigns,
called the "Agent").
WITNESSETH:
WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, the Owner Participant has entered into the Trust
Agreement pursuant to which the Owner Trustee agrees, among other things, to
hold the Trust Estate for the benefit of the Owner Participant thereunder on the
terms specified in the Trust Agreement and, subject to the terms and conditions
hereof, to lease the Equipment Interest and the Foundation Interest from Old
Dominion under the Equipment Head Lease and the Foundation Head Lease,
respectively, and concurrently therewith lease such Equipment Interest and
Foundation Interest to Old Dominion under the Equipment Operating Lease and the
Foundation Operating Lease, respectively.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION
AGREEMENT
SECTION 1.1. DEFINITIONS. The capitalized terms used in this
Participation Agreement (including the foregoing recitals) and not otherwise
defined herein shall have the respective meanings specified in Appendix A
hereto. All references to sections, schedules and exhibits herein are to
sections, schedules and exhibits of this Participation Agreement unless
otherwise indicated and the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Participation Agreement as a whole and not
to any particular section or other subdivision.
SECTION 1.2. DIRECTLY OR INDIRECTLY. Where any provision in this
Participation Agreement refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.
SECTION 2. PARTICIPATION; CLOSING DATE; TRANSACTION COSTS
SECTION 2.1. AGREEMENTS TO PARTICIPATE. Subject to the terms and
conditions of this Agreement, and in reliance on the agreements, representations
and warranties made herein, the parties agree to participate in the transactions
described in this Section 2.1 on the Closing Date as follows:
(1) The Owner Participant agrees to make an Equity Investment
in the Owner Trust in an amount equal to (a) the Owner Participant's
Commitment and (b) an amount sufficient to pay the Transaction Costs
which the Owner Trustee is responsible to pay pursuant to Section
2.4(a) hereof.
(2) Subject to the rights of Virginia Power pursuant to the
Clover Agreements, Old Dominion agrees to lease the Equipment Interest
and Foundation Interest to the Owner Trustee, the Owner Trustee agrees
to lease the Equipment Interest and the Foundation Interest from Old
Dominion, and each agrees to execute and deliver the Equipment Head
Lease, the Foundation Head Lease and the Clover Agreements Assignment.
(3) The Owner Trustee agrees to lease the Equipment Interest
and the Foundation Interest to Old Dominion, Old Dominion agrees to
lease the Equipment Interest and the Foundation Interest from the Owner
Trustee and each agrees to execute and deliver the Equipment Operating
Lease and the Foundation Operating Lease.
(4) Subject to the rights of Virginia Power under the Clover
Agreements, Old Dominion agrees to grant an option to lease the Ground
Interest to the Owner Trustee pursuant to the Option Agreement.
(5) The Original Lenders agree to enter into the Loan
Agreement and make non-recourse secured loans to the Owner Trustee in
an aggregate principal amount equal to the Original Lenders' Loan
Commitments.
(6) The Owner Trustee agrees to enter into the Loan Agreement
and issue Loan Certificates to the Original Lenders in the aggregate
principal amount equal to their Loan Commitments.
(7) The Owner Trustee agrees to use the funds received from
the Owner Participant and the Original Lenders pursuant to clauses
(1)(a) and (5), respectively, of this Section 2.1 to pay on the Closing
Date all Equipment Head Lease Basic Rent and
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Foundation Head Lease Basic Rent, which are amounts equal to the
Equipment Interest Cost and Foundation Interest Cost, due under the
Equipment Head Lease and the Foundation Head Lease, respectively.
(8) Old Dominion agrees to pledge certain obligations,
deposits and bonds to the Owner Trustee to secure its obligations under
the Equipment Operating Lease and the Foundation Operating Lease.
(9) The Owner Participant and Old Dominion agree to enter
into the Tax Indemnity Agreement.
(10) The Owner Trustee agrees to use the funds received from
the Owner Participant pursuant to clause (1)(b) of this Section 2.1 to
pay all Transaction Costs which the Owner Trustee is responsible to pay
pursuant to Section 2.4(a) hereof.
SECTION 2.2. CLOSING DATE; PROCEDURE FOR PARTICIPATION.
(a) CLOSING DATE. The closing of the transactions contemplated
hereby (the "Closing") shall take place at 10:00 a.m., New York
City time, on the Scheduled Closing Date or such other date as the
parties hereto shall mutually agree (the "Closing Date"), at the
offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
(b) PROCEDURES FOR FUNDING. Unless the Closing Date shall
have been postponed pursuant to Section 2.2(c), the Owner
Participant and the Original Lenders shall make the amount of their
Commitments available to the Owner Trustee not later than 10:00 a.m.,
New York City time, on the Scheduled Closing Date, by transferring or
delivering such amount, in funds immediately available on the Closing
Date, to:
Bank of New York
ABA #: 000-0000-00
For further credit to
Rabobank Nederland, New York Branch
ABA #: 000-0000-000
For further credit to
State Street Bank and Trust Company
Boston, Massachusetts
ABA #: 000-0000-00
For credit to account No. 0000-000-0
Attention: Xxxxxx Xxxxxxx
For further credit to Old Dominion/First Union Account
(c) POSTPONEMENT OF THE CLOSING. The Scheduled Closing Date
may be postponed from time to time for any reason if Old Dominion gives
the Owner Participant, the Owner Trustee, the Original Lenders and the
Agent telex, telegraphic, facsimile or telephonic (confirmed in
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writing) notice of such postponement and notice of the date to which the Closing
has been postponed, such notice of postponement to be received by each party no
later than 10:00 a.m., New York City time, on the originally Scheduled Closing
Date. If, prior to receipt of a postponement notice under this Section 2.2(c),
any Participant shall have provided funds in accordance with Section 2.2(b),
such funds shall be returned to such Participant, as soon as reasonably
practicable but in no event later than the second Business Day following the
Scheduled Closing Date, unless such Participant shall have otherwise directed.
All funds made available pursuant to Section 2.2(b) will be held by the Owner
Trustee in trust for the Participant who provided such funds and shall not be
part of the Collateral or the Trust Estate, shall be invested by the Owner
Trustee in accordance with clause (d) below and such funds shall remain the sole
property of such Participant unless and until applied to pay the Equipment Head
Lease Basic Rent and Foundation Head Lease Basic Rent or returned to the
applicable Participant, as provided in this Agreement.
(d) INVESTMENT OF FUNDS. If on the Scheduled Closing Date a Participant
has made its Commitment available to the Owner Trustee in accordance with
Section 2.2(b), the Closing does not occur on such date and the Owner Trustee is
unable to return such funds to the Participants who made them available, the
Owner Trustee shall, subject to Section 2.2(c) above, use reasonable efforts to
invest such funds from time to time at Old Dominion's expense and risk in
interest bearing deposit accounts at the Trust Company or repurchase agreements
backed by U.S. government securities until such funds can be returned to the
Participants. Subject to payment for the account of the relevant Participant of
any reimbursement for loss of use of funds due to it at the Applicable Rate, any
net gain realized on the investment of such funds (including interest) shall be
paid to Old Dominion by the Owner Trustee on the earlier of (i) the date such
funds are returned to the Participants pursuant to Section 2.2(c) and (ii) the
Closing Date. The Owner Trustee shall not be liable for any interest on or loss
resulting from such investments and, if such funds are utilized to pay Equipment
Head Lease Basic Rent and Foundation Head Lease Basic Rent on the Closing Date,
Old Dominion shall reimburse the Owner Trustee for any net loss realized on the
investment of such funds. Old Dominion shall reimburse the Participants on the
Closing Date for any net loss realized on the investments of such funds. In
order to obtain funds for payment of the Equipment Head Lease Basic Rent and
Foundation Head Lease Basic Rent or to return funds made available to the Owner
Trustee by any Participant, the Owner Trustee is authorized to sell any
investments or obligations purchased as aforesaid.
(e) EXPIRATION OF COMMITMENTs. The obligation of the Owner Participant
to make its Equity Investment and the obligations of the Original Lenders to
make the Loans shall expire at 11:59 p.m., New York City time, on March 31,
1996. If the Closing Date has not occurred on or before March 31, 1996, the
parties hereto shall have no obligation under this Agreement.
SECTION 2.3. OWNER PARTICIPANT'S INSTRUCTIONS TO THE OWNER TRUSTEE. (a)
The Owner Participant agrees that the making available to the Owner Trustee of
the amount of its Commitment in accordance with the terms of Section 2.2 shall
constitute, without further act, authorization and direction by the Owner
Participant to the Owner Trustee, subject, on the Closing Date, to the
conditions set forth in Section 4 having been fulfilled to the satisfaction of
4
the Owner Participant or waived by the Owner Participant, to take the actions
specified in Section 3.01 of the Trust Agreement.
(b) The Owner Participant agrees that the authorization by the Owner
Participant or its counsel to release to Old Dominion the Owner Participant's
Commitment shall constitute, without further act, notice and confirmation that
all conditions set forth in Section 4 were either met to the satisfaction of the
Owner Participant or, if not so met, were waived by the Owner Participant.
SECTION 2.4. TRANSACTION COSTS.
(a) If the transactions contemplated by this Participation Agreement
are consummated, (x) the Owner Trustee will promptly pay, with funds provided by
the Owner Participant, all Transaction Costs identified by the Closing Date and
reflected on Schedule 1 hereto and all Transaction Costs referred to in clauses
(ii), (ix) and (xii) of the definition of Transaction Costs identified following
the Closing Date and (y) Old Dominion will pay all other Transaction Costs,
whether identified before or after the Closing Date and whether or not reflected
on Schedule 1 hereto.
(b) Following the Closing Date, Old Dominion will be responsible for
the annual administration fees and expenses of the Owner Trustee under the Trust
Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE AND
THE TRUST COMPANY. Except as set forth in the last sentence of this Section 3.1,
the Trust Company, in its individual capacity, represents and warrants that, as
of the Closing Date:
(a) the Trust Company is a state-chartered trust company duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, has the corporate power and authority, as Owner
Trustee and/or in its individual capacity to the extent expressly provided
herein or in the Trust Agreement, to enter into and perform its obligations
under the Trust Agreement and assuming due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, this Agreement and each of the
other Operative Documents to which it is a party;
(b) (i) the Trust Agreement has been duly authorized, executed and
delivered by the Trust Company and (ii) assuming the due authorization,
execution and delivery of the Trust Agreement by the Owner Participant, the
Trust Agreement constitutes a legal, valid and binding obligation of the Owner
Trustee, enforceable against it in its individual capacity or as Owner Trustee,
as the case may be, in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity;
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(c) (i) this Agreement and each of the other Operative Documents to
which the Owner Trustee is a party (other than the Trust Agreement and the Loan
Certificates) have been duly authorized, executed and delivered by the Trust
Company, and (ii) assuming the due authorization, execution and delivery of this
Agreement and each of the other Operative Documents by each party hereto and
thereto other than the Owner Trustee, this Agreement and each of the other
Operative Documents (other than the Trust Agreement and the Loan Certificates)
to which the Owner Trustee is a party constitute a legal, valid and binding
obligation of the Owner Trustee, enforceable against the Trust Company in its
individual capacity or as Owner Trustee, as the case may be, in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, arrangement, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity;
(d) upon the execution and delivery of the Loan Certificates by the
Owner Trustee in accordance with the Loan Agreement and payment therefor in
accordance with the terms of this Agreement, the Loan Certificates will
constitute the legal, valid and binding obligations of the Owner Trustee,
enforceable against the Owner Trustee in accordance with their terms, except as
the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, arrangement, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity;
(e) the execution and delivery by the Trust Company, in its individual
capacity or as Owner Trustee, as the case may be, of this Agreement and the
other Operative Documents to which it is a party, the consummation by the Trust
Company, in its individual capacity or as Owner Trustee, as the case may be, of
the transactions contemplated hereby and thereby, and the compliance by the
Trust Company, in its individual capacity or as Owner Trustee, as the case may
be, with the terms and provisions hereof and thereof, do not and will not
contravene any Applicable Law of the United States of America or the
Commonwealth of Massachusetts governing the Trust Company or the banking or
trust powers of the Trust Company, or the Trust Agreement, or its organizational
documents or by-laws, or contravene the provisions of, or constitute a default
by the Trust Company under, or result in the creation of any Lessor's Lien upon
the Trust Estate or any indenture, mortgage or other material contract,
agreement or instrument to which the Trust Company is a party or by which the
Trust Company or its property is bound; PROVIDED, HOWEVER, that no
representation is made with respect to the right, power or authority of the
Trust Company or the Owner Trustee to act as operator of Clover Unit 1 following
an Event of Default;
(f) no authorization or approval or other action by, and no notice to
or filing with, any Governmental Entity is required for the due execution,
delivery or performance by the Trust Company of this Agreement or the other
Operative Documents to which it is a party, other than any such authorization or
approval or other action or notice or filing as has been duly obtained, taken or
given;
(g) there is no pending or, to the knowledge of the Trust Company,
threatened action, suit, investigation or proceeding against the Trust Company
either in its individual capacity or
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as Owner Trustee, before any Governmental Entity which, if determined adversely
to it, would materially adversely affect the ability of the Trust Company, in
its individual capacity or as Owner Trustee, as the case may be, to perform its
obligations under the Trust Agreement, this Agreement or the other Operative
Documents to which it is a party;
(h) the Owner Trustee's right, title and interest in and to the Trust
Estate is free of any Lessor's Liens attributable to the Trust Company in its
individual capacity; and
(i) its chief executive office is located at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, and the place where its records concerning the Equipment
Head Lease Interest, the Foundation Head Lease Interest and all its interest in,
to and under all documents relating to the Trust Estate, is located at Two
International Place, Boston, Massachusetts.
Notwithstanding anything to the contrary contained herein, the representations
and warranties (or portion thereof as indicated) contained in clauses (c)(ii)
and (d) of this Section 3.1 (to the extent they relate to the Owner Trustee) are
made by the Owner Trustee in its trust capacity. Notwithstanding any provision
of any Operative Document, any representation or warranty by the Owner Trustee
in the Operative Documents as to the absence of Owner Participant's Liens has
been made by the Owner Trustee only in its trust capacity.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE OWNER
PARTICIPANT. The Owner Participant represents and warrants that, as of the
Closing Date:
(a) the Owner Participant is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States of America and has the corporate power and authority to enter into and
perform its obligations under this Agreement, the Trust Agreement and the Tax
Indemnity Agreement;
(b) this Agreement, the Trust Agreement and the Tax Indemnity Agreement
have been duly authorized, executed and delivered by the Owner Participant and
assuming the due authorization, execution and delivery by each other party
thereto, constitute the legal, valid and binding obligations of the Owner
Participant, enforceable against the Owner Participant in accordance with their
respective terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, arrangement, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity;
(c) the execution and delivery by the Owner Participant of this
Agreement, the Trust Agreement and the Tax Indemnity Agreement, the consummation
by the Owner Participant of the transactions contemplated hereby and thereby,
and compliance by the Owner Participant with the terms and provisions hereof and
thereof, do not and will not contravene any federal or Florida Applicable Law
binding on the Owner Participant, or its articles of incorporation or by-laws,
or contravene the provisions of, or constitute a default under, or result in the
creation of any Lien (other than any Lien created under any Operative Document)
upon the Trust Estate under any indenture, mortgage or other material contract,
agreement or instrument to which the Owner Participant is a party or by which
the Owner Participant or its property is bound (it being
7
understood that no representation or warranty is being made as to any Applicable
Laws relating to Clover Unit 1 or the Clover Real Estate);
(d) no authorization or approval or other action by, and no notice to
or filing with, any federal or Florida Governmental Entity is required for the
due execution, delivery or performance by the Owner Participant of this
Agreement, the Trust Agreement or the Tax Indemnity Agreement, other than any
authorization or approval or other action or notice or filing as has been duly
obtained, taken or given (it being understood that no representation or warranty
is being made as to any Applicable Laws relating to Clover Unit 1 or the Clover
Real Estate);
(e) there is no pending or, to the knowledge of the Owner Participant,
threatened action, suit, investigation or proceedings against the Owner
Participant before any Governmental Entity which, if determined adversely to it,
would materially adversely affect the Owner Participant's ability to perform its
obligations under this Agreement, the Trust Agreement or the Tax Indemnity
Agreement;
(f) the Trust Estate is free of any Owner Participant's Liens;
(g) no part of the funds to be used by the Owner Participant to make
its investment pursuant to this Agreement, directly or indirectly, constitutes
or is deemed to constitute assets of any Plan; and
(h) the Owner Participant is purchasing the Beneficial Interest to be
acquired by it for its own account with no present intention of distributing
such Beneficial Interest or any part thereof in any manner which would require
registration under the Securities Act, but without prejudice, however, to the
right of the Owner Participant at all times to sell or otherwise dispose of all
or any part of such Beneficial Interest under a registration statement under the
Securities Act or under an exemption from such registration available under such
Act.
SECTION 3.3. REPRESENTATIONS AND WARRANTIES OF OLD DOMINION. Old
Dominion represents and warrants that, as of the Closing Date:
(a) Old Dominion is a wholesale power supply cooperative duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Virginia, is duly licensed or qualified and in good standing in
each jurisdiction in which the failure so to qualify would have a material
adverse effect on its financial condition, business or operations or its ability
to enter into and perform its obligations under this Agreement or any of the
other Operative Documents to which it is a party, and has the corporate power
and authority to carry on its business as now conducted and to enter into and
perform its obligations under this Agreement and each of the other Operative
Documents to which it is a party;
(b) this Agreement and each of the other Operative Documents to which
it is a party have been duly authorized, executed and delivered by Old Dominion
and, assuming the due authorization, execution and delivery by each other party
thereto, constitute the legal, valid and binding obligations of Old Dominion,
enforceable against Old Dominion in accordance with their
8
respective terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, arrangement, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity;
(c) the execution, delivery and performance by Old Dominion of this
Agreement and each of the other Operative Documents to which it is a party, the
consummation by Old Dominion of the transactions contemplated hereby and
thereby, and compliance by Old Dominion with the terms and provisions hereof and
thereof, do not and will not contravene any Applicable Law binding on Old
Dominion or its property, or its certificate of incorporation or by-laws, or
contravene the provisions of, or constitute a default by Old Dominion under, or
result in the creation of any Lien (except for Permitted Liens) upon the
property of Old Dominion or any indenture, mortgage or other material contract,
agreement or instrument to which Old Dominion is a party (including, without
limitation, the Clover Agreements, the Old Dominion Indenture, the Pollution
Control Assets Lease and the Conveyance and Security Agreement, dated as of
December 15, 1994, between the Pollution Control Assets Lessor and Old Dominion)
or by which Old Dominion or any of its property is bound;
(d) no authorization or approval or other action by, and no notice to
or filing with, any Governmental Entity is required (A) for the due execution,
delivery or performance by Old Dominion of this Agreement or the other Operative
Documents to which it is a party or (B) to be obtained by Old Dominion, the
Owner Trustee, or the Owner Participant with respect to the use, occupancy,
possession, operation, maintenance, ownership, lease, alteration or repair of
Clover Unit 1 prior to termination of the Term of the Equipment Operating Lease
or the Foundation Operating Lease in accordance with the Operative Documents,
or, without regard to any other transactions of the Owner Participant and the
Owner Trustee and assuming that neither the Owner Participant or the Owner
Trustee or any Affiliate of any of them is an "electric utility" or a "public
utility" or a "public utility holding company" under any Applicable Law
immediately prior to the Closing, with respect to the participation by Owner
Trustee or the Owner Participant in the transactions contemplated by this
Agreement and the other Operative Documents, other than those which have already
been duly obtained and other than (i) the FERC Order and the Virginia Commission
Order which have been obtained, (ii) any action of the FERC or the Virginia
Commission which may be required in connection with the substitution of
Qualifying Security pursuant to Section 7.6 hereof or a Qualifying Letter of
Credit, (iii) the filing by the Owner Participant and the Owner Trustee of a
Form U-7D with the Securities and Exchange Commission under Rule 7(d) of the
Holding Company Act, (iv) as may be required in connection with any refinancing
of the Loan Certificates or the issuance of Additional Loan Certificates, (v) as
may be required under Applicable Law providing for the supervision or regulation
of the Owner Participant or the Owner Trustee, (vi) as may be required with
respect to the Owner Participant or the Owner Trustee as a result of investing,
lending or other commercial activity in which the Owner Trustee or the Owner
Participant is or may be engaged other than the transactions contemplated hereby
or by any of the other Operative Documents, (vii) as may be required under
existing Applicable Laws to be obtained, given, accomplished or renewed from
time to time in connection with the maintenance or operation of Clover Unit 1
and which are routine in nature or which cannot be obtained, or are not normally
applied for, prior to the time they are required, and which Old Dominion has no
reason to believe will not be
9
timely obtained, (viii) as may be required in consequence of any transfer of
ownership of the Trust Estate by the Owner Trustee or any relinquishment of use
or operation of Clover Unit 1 by Old Dominion or (ix) as may be required under
any Applicable Law enacted or adopted after the date hereof;
(e) no approval or consent of Virginia Power (except as have been
obtained), the Pollution Control Assets Lessor, the Indenture Trustee or any
holders of Old Dominion's Bonds is required in connection with the transactions
contemplated by the Operative Documents;
(f) neither (i) consummation of the transactions to be consummated on
the Closing Date, (ii) except as provided in Section 6.2 and 6.3 of the
Equipment Head Lease and Section 6.2 and 6.3 of the Foundation Head Lease, the
exercise by Old Dominion of the Purchase Option and the Foundation Purchase
Option or the Service Contract Option on the Expiration Date or (iii) any
transfer of the Beneficial Interest in accordance with Section 5.1 prior to
termination of the Equipment Operating Lease or the Foundation Operating Lease,
gives rise, or will give rise, to a right by Virginia Power of first refusal, or
right to consent, under Section 15.02 or 15.03 of the Clover Operating Agreement
or Section 17.02 or 17.03 of the Clover Ownership Agreement;
(g) there is no pending or, to the knowledge of Old Dominion,
threatened action, suit, investigation or proceeding against Old Dominion before
any Governmental Entity which, if determined adversely to it, would materially
adversely affect Old Dominion's financial condition, business or operations or
its ability to perform its obligations hereunder or under the other Operative
Documents to which it is a party;
(h) the insurance (including all related endorsements) required by
Section 11 of the Equipment Operating Lease and the Foundation Operating Lease
is in full force and effect and all premiums thereon are current;
(i) the chief executive office and principal place of business of Old
Dominion and the office where Old Dominion will keep its corporate records
concerning the Clover Unit 1, the Clover Real Estate and the Operative Documents
is located at Glen Allen, Virginia;
(j) no Event of Default, Event of Loss (other than a Regulatory Event
of Loss) or event that with the passage of time or giving of notice or both
would constitute an Event of Default or Event of Loss (other than a Regulatory
Event of Loss) has occurred and is continuing;
(k) no event of default or event of loss has occurred and is continuing
under the Pollution Control Assets Lease;
(l) no event of default has occurred and is continuing under the Old
Dominion Indenture;
(m) Old Dominion is not an "investment company" or an "affiliated
person" of an "investment company" within the meaning of the Investment Company
Act of 1940;
10
(n) neither Old Dominion nor anyone authorized by it has directly or
indirectly offered or sold any interest in the Beneficial Interest or the Loans
or any part thereof, or in any similar security or lease, or in any security or
lease the offering of which for the purposes of the Securities Act would be
deemed to be part of the same offering as the offering of the Beneficial
Interest or the Loans or any part thereof or solicited any offer to acquire any
of the same in violation of the registration requirements of Section 5 of the
Securities Act. The representation and warranty in the preceding sentence is
made by Old Dominion in reliance upon, and is subject to the accuracy of, the
representation and warranty made by the Owner Participant in Section 3.2(h)
hereof;
(o) Old Dominion is not in default in any respect, and no condition
exists that with notice or lapse of time or both would constitute a default in
any respect, under the Clover Agreements or any mortgage, indenture or other
material contract, agreement or instrument to which Old Dominion is a party or
by which Old Dominion or its property is bound, in any such case where any such
default, individually or in the aggregate, could reasonably be expected to have
a material adverse effect on (i) its financial condition, business or operations
or (ii) its ability to enter into and perform its obligations under this
Agreement or any other Operative Document;
(p) the Unit 1 Equipment and the Unit 1 Foundation are located on the
Real Property;
(q) Old Dominion has (i) good and valid title, as a tenant-in-common
with Virginia Power to the Retained Assets free and clear of all Liens other
than Permitted Liens, (ii) a valid leasehold interest, to the extent of a 50%
undivided interest, in the Pollution Control Assets free and clear of all Liens
other than Permitted Liens, and (iii) good and marketable title as a
tenant-in-common with Virginia Power in the Clover Real Estate;
(r) the Equipment Head Lease and the Foundation Head Lease create valid
leasehold interests in favor of the Owner Trustee in the Equipment Interest and
the Foundation Interest, respectively, under the laws of the Commonwealth of
Virginia;
(s) assuming that the Owner Trustee maintains possession and control
over the Collateral (as defined in the Pledge Agreement) in accordance with the
applicable provisions of the Uniform Commercial Code, the Pledge Agreement
creates a valid and perfected security interest in such Collateral as
contemplated thereby subject to the provisions of Section 9-306 of the Uniform
Commercial Code;
(t) assuming that the Owner Trustee maintains possession and control
over the Deposit in accordance with the provisions of the Deposit Agreement, the
Deposit Pledge Agreement creates a valid and enforceable pledge of the Deposit
as contemplated thereby;
(u) assuming that the Loan Agreement has been duly authorized, executed
and delivered by each party thereto, the Loan Agreement creates a valid (subject
to the rights of quiet enjoyment of Old Dominion under Section 9 hereof and
Section 4.2 of the Equipment Operating Lease) security interest in favor of the
Agent in the Equipment Interest. No filing,
11
recording, registration or notice with any federal or state Governmental Entity
is necessary to establish or, except for such filing and recording as have been
made pursuant to Section 4.20 hereof and for the performance of the terms of the
Loan Agreement, to perfect the Agent's security interest in the Equipment
Interest;
(v) assuming that the Leasehold Mortgage has been duly authorized,
executed and delivered by each of the parties thereto, the Leasehold Mortgage
creates a valid (subject to the rights of quiet enjoyment of Old Dominion under
Section 9 hereof and Section 4.2 of the Foundation Operating Lease) lien in
favor of the Agent for the benefit of the Original Lenders in the Foundation
Interest. No filing, recording, registration or notice with any federal or state
Governmental Entity is necessary to establish or, except for such filings and
recordings as have been made pursuant to Section 4.20 and for the performance of
the terms of the Leasehold Mortgage, to perfect the Agent's security interest in
the Foundation Interest;
(w) Old Dominion's audited financial statements for the fiscal year
ended December 31, 1994, including the footnotes thereto, present fairly the
consolidated financial position, results of operations and cash flow for Old
Dominion as of and for the periods stated and have been prepared in conformity
with GAAP on a consistent basis; and since December 31, 1994 no material adverse
change has occurred in the financial condition, business or operations of Old
Dominion and no event has occurred since December 31, 1994 which would
materially adversely affect the ability of Old Dominion to perform its
obligations under this Agreement or any other Operative Document to which it is
a party;
(x) Old Dominion owns or possesses or has obtained all material
governmental franchises, licenses and permits necessary to lease or own, as the
case may be, and to operate, its properties and to carry on its business as
presently conducted where its ownership or lease of substantial properties or
the conduct of its business requires such franchises, licenses or permits and
where the failure to do so would materially adversely affect its financial
condition, business or operations;
(y) Old Dominion has filed all federal, state and local tax returns
which are required to be filed by it and has paid (prior to their delinquency
dates) any taxes which have become due pursuant to such returns or pursuant to
any assessment received by it (other than taxes and assessments the payment of
which is being contested in good faith by Old Dominion, with adequate reserves,
in the aggregate, for the payment of which having been set aside on the books of
Old Dominion), and Old Dominion has no Actual Knowledge of any actual or
proposed deficiency or additional assessment in connection therewith which,
either in any case or in the aggregate, would materially adversely affect Old
Dominion's financial condition, business or operations; and any charges,
accruals and reserves on the books of Old Dominion with respect to federal,
state and local taxes for all open years, and for the current fiscal year, make
adequate provision for any unpaid tax liabilities for such periods;
(z) the qualification of any of the Agent, the Original Lenders, the
Owner Trustee, the Trust Company or the Owner Participant for admission to do
business under the laws of the Commonwealth of Virginia or any political
subdivision thereof is not required in connection with
12
the execution and delivery of the Operative Documents, the making of the Equity
Investment or the Loans or, prior to termination of the Equipment Operating
Lease or the Foundation Operating Lease, the performance by the Agent, any
Lender, the Owner Trustee or the Owner Participant of this Agreement or any
other Operative Document to which it is a party;
(aa) Old Dominion has validly submitted to the jurisdiction of the
Supreme Court of the State of New York, New York County and the United States
District Court for the Southern District of New York;
(ab) the choice by Old Dominion of the laws of the State of New York to
govern this Agreement and the other Operative Documents to which Old Dominion is
a party and which are expressed to be governed by the laws of the State of New
York is valid and binding under the Applicable Laws of the Commonwealth of
Virginia, and a court in the Commonwealth of Virginia would uphold such choice
of law in a legal proceeding to enforce this Agreement and such other Operative
Documents to which Old Dominion is a party brought in such court, subject to the
enforceability of security documents being subject to the laws applicable to or
affecting the collateral provided in respect thereof;
(ac) the use by Old Dominion of the proceeds of the Loan Certificates
and the Equity Investment will not violate or result in a violation of Section 7
of the Exchange Act, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the regulations of the Federal
Reserve System;
(ad) performance by any of the Agent, any Lender, the Owner Trustee, or
the Owner Participant of any action required under the Operative Documents will
not violate any Applicable Law of the Commonwealth of Virginia or any political
subdivision thereof;
(ae) Clover Unit 1 was declared commercial by the Construction
Management Committee under the Clover Ownership Agreement on October 6, 1995;
and
(af) Old Dominion is an "electric utility company," but is not a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" within the meaning of the Holding Company
Act.
SECTION 3.4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH LENDER.
(a) Each Lender represents and warrants that, as of the Closing Date:
(i) no part of the funds to be used by such Lender to make its
Loan and acquire its Loan Certificate pursuant to this Agreement or the Loan
Agreement constitutes or is deemed to constitute assets (within the meaning of
ERISA and any applicable rules or regulations thereunder) of any Plan; and
(ii) such Lender is making the Loans and acquiring the Loan
Certificates for investment and not with a view towards any resale or
distribution thereof, and neither it nor anyone authorized by it to act on its
behalf has directly or indirectly offered any Loan Certificate
13
or any interest in the Trust Estate, the Collateral, or any similar security for
sale to, or solicited any offer to acquire any of the same from, anyone, it
being understood that such Lender makes no representations as to actions taken
by the Owner Participant, the Owner Trustee or Old Dominion or anyone acting on
behalf of such Persons.
(b) Each Lender represents, warrants and agrees that it will not
transfer the Loan Certificates it holds except in a transaction constituting an
exempt transaction under the Securities Act.
SECTION 3.5. REPRESENTATIONS AND WARRANTIES OF THE AGENT. The Agent
represents and warrants that, as of the Closing Date:
(a) the Agent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has the corporate power
and authority to enter into and perform its obligations, as Agent, under this
Agreement and the other Operative Documents to which it is a party;
(b) this Agreement and the other Operative Documents to which it is a
party have been duly authorized, executed and delivered by the Agent and
assuming the due authorization, execution and delivery by each other party
thereto, constitute the legal, valid and binding obligations of the Agent
enforceable against the Agent in accordance with their respective terms, except
as the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, arrangement, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity; and
(c) the execution, delivery and performance by the Agent of this
Agreement and each of the other Operative Documents to which it is a party, the
consummation by the Agent of the transactions contemplated hereby or thereby,
and compliance by the Agent with the provisions hereof and thereof do not
contravene any Applicable Laws binding on the Agent or its organizational
documents or by-laws, or contravene the provisions of, or constitute a default
by the Agent under any indenture, mortgage or other material contract, agreement
or instrument to which the Agent is a party or by which the Agent or its
property is bound.
SECTION 4. CLOSING CONDITIONS
The obligations of the Owner Participant, the Owner Trustee, the Agent,
the Original Lender and Old Dominion to consummate the transactions contemplated
hereby on the Closing Date shall be subject to the following conditions, except
that the obligations of any Person shall not be subject to such Person's own
performance or compliance.
SECTION 4.1. OPERATIVE DOCUMENTS. On or before the Closing Date, each
of the Operative Documents to be delivered at the Closing shall have been duly
authorized, executed and delivered by the parties thereto in substantially the
form attached as an Exhibit hereto, shall
14
each be in full force and effect, and executed counterparts of each shall have
been delivered to each of the parties hereto.
SECTION 4.2. EQUITY INVESTMENT; LOANS. The Owner Participant shall have
made the Equity Investment and the Original Lender shall have made its
respective Loans available to the Owner Trustee at the place and in the manner
contemplated by Section 2.
SECTION 4.3. PLEDGED COLLATERAL. Old Dominion shall have issued the
1996 Series A Bonds and deposited the 1996 Series A Bonds and a copy of the the
Bond Insurance Policy with the Owner Trustee pursuant to the Pledge Agreement.
SECTION 4.4. DEPOSIT. Old Dominion shall have deposited funds
with the Issuer in an amount sufficient to create the Deposit.
SECTION 4.5. RESERVED.
SECTION 4.6. RESERVED.
SECTION 4.7. CERTIFIED COPIES. The Owner Participant, the Owner
Trustee, the Agent and the Original Lender shall have received copies certified
by the Secretary of Old Dominion of the Clover Operating Agreement, the Clover
Ownership Agreement, the Old Dominion Indenture and the Pollution Control Assets
Lease, and all amendments to each thereof.
SECTION 4.8. CORPORATE DOCUMENTS. Each of the parties hereto shall have
received certified copies of the by-laws and organizational documents of each of
the other parties hereto (other than from the Agent and the Original Lenders),
resolutions of the Board of Directors of each such other party duly authorizing
the transaction and such documents and such evidence as it may reasonably
request in order to establish the authority of each such other party to
consummate the transactions contemplated by this Agreement, the taking of all
corporate and other proceedings in connection therewith and compliance with the
conditions herein or therein set forth and the incumbency of all officers
signing any of the Operative Documents; the foregoing documents shall be
reasonably satisfactory to the recipient.
SECTION 4.9. NO DEFAULTS. No Event of Default, Event of Loss or event
that with the passage of time or giving of notice or both would constitute an
Event of Default or an Event of Loss shall have occurred and be continuing; no
event of default or event of loss or event that with the passage of time or
giving of notice or both would constitute an event of default or event of loss
under the Pollution Control Assets Lease shall have occurred and be continuing;
and no event of default or event that with the passage of time or giving of
notice or both would constitute an event of default under the Old Dominion
Indenture shall have occurred and be continuing.
SECTION 4.10. NO THREATENED PROCEEDINGS. No action, suit,
investigation or proceeding shall have been instituted nor shall governmental
action be threatened before any Governmental Entity, nor shall any order,
judgment or decree have been issued or proposed to be issued by
15
any Governmental Entity at the time of the Closing Date, to set aside, restrain,
enjoin or prevent the consummation of the transactions contemplated by the
Operative Documents.
SECTION 4.11. CONSENTS. All approvals and consents, if any, of (a) any
trustees or holders of any indebtedness or obligations of the Transaction
Parties, (b) Virginia Power and (c) the Pollution Control Assets Lessor, which
are required in connection with the transactions contemplated by the Operative
Documents, shall have been duly obtained and be in full force and effect and
shall be in the form and substance satisfactory to the Owner Participant, the
Original Lender and the Agent; and the Owner Participant, the Owner Trustee, Old
Dominion, the Agent and the Original Lender shall have received a copy of such
approval or consent certified by the applicable Transaction Party in the case of
clause (a) or by the Secretary of Old Dominion in the case of clauses (b) or
(c).
SECTION 4.12. GOVERNMENTAL ACTIONS. All actions, if any, required to
have been taken by any Governmental Entity on or prior to the Closing Date in
connection with the transactions contemplated by any Operative Documents on the
Closing Date shall have been taken and all orders, permits, waivers, exemptions,
authorizations and approvals of such Governmental Entities required to be in
effect on the Closing Date in connection with the transactions (other than in
connection with the substitution of the Qualifying Security pursuant to Section
7.6(b) or the providing of a Qualifying Letter of Credit, if required)
contemplated by the Operative Documents on the Closing Date shall have been
issued; and all such orders, permits, waivers, exemptions, authorizations and
approvals shall be in full force and effect on the Closing Date; and the Owner
Participant, the Owner Trustee, the Agent and the Original Lender shall have
received a copy of any such order, permit, waiver, exemption, authorization or
approval certified by the appropriate official of the Governmental Entity
issuing, granting or giving such order, permit, waiver, exemption, authorization
or approval.
SECTION 4.13. INSURANCE. Insurance (including all related endorsements)
complying with the requirements of Section 11 of the Equipment Operating Lease
and Section 11 of the Foundation Operating Lease shall be in full force and
effect and all premiums thereon shall be current. The Owner Participant, the
Owner Trustee, the Original Lender and the Agent shall have received a
certificate or certificates dated the Closing Date of an independent insurance
broker or carrier reasonably satisfactory to such Persons specifying the types
and amounts of insurance maintained pursuant to Section 11 of the Equipment
Operating Lease and Section 11 of the Foundation Operating Lease, and stating
that such insurance is in full force and effect, and that no notice of
cancellation, non-renewal or material change in provisions has been issued.
SECTION 4.14. ENGINEERING REPORT. Each such Person shall have received,
on or before the Closing Date, a final copy of the Engineering Report prepared
by the Engineer reasonably acceptable in form and substance by Owner
Participant.
SECTION 4.15. SURVEY. The Owner Participant, the Owner Trustee,
the Original Lender and the Agent shall have received a current survey of the
Real Property in form reasonably satisfactory to each of them.
16
SECTION 4.16. APPRAISAL. The Owner Participant shall have received the
Appraisal prepared by the Appraiser, reasonably satisfactory in form and
substance to the Owner Participant; and the Agent shall receive a letter from
the Appraiser as to the fair market value of the Lessor's Unit 1 Interest on the
Closing Date.
SECTION 4.17. INVESTMENT BANKING OPINION. The Owner Participant shall
have received a satisfactory opinion of BOT or another investment banking firm
reasonably acceptable to the Owner Participant to the effect that the terms and
conditions for a New Loan set forth on Schedule 3 to the Equipment Operating
Lease are commercially reasonable and the possibility that the New Loan at a
market rate of interest will fail to be made on the Expiration Date to an
independent third party lender in the event the Service Contract Option is
elected, is remote.
SECTION 4.18. OPINION WITH RESPECT TO CERTAIN TAX ASPECTS. The Owner
Participant shall have received the opinion, dated the Closing Date, of
Xxxxxxxxxx & Xxxxx LLP addressed to the Owner Participant, in form and substance
satisfactory to the Owner Participant, containing such counsel's favorable
opinion with respect to the federal income tax aspects of the transaction
contemplated hereby.
SECTION 4.19. OPINION OF COUNSEL. Each such Person shall have received
an opinion, dated the Closing Date, of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, New York
counsel to Old Dominion, XxXxxxx Xxxx, Virginia counsel to Old Dominion, Xxxxx
Xxxxx, Esq., counsel to the Owner Participant, Xxxxxxxxxx & Xxxxx LLP, New York
counsel to the Owner Participant, Xxxx & Valentine, Virginia counsel to the
Owner Participant and the Original Lender, Day, Xxxxx & Xxxxxx, Massachusetts,
counsel to the Owner Trustee, Xxxxx Xxxx & Xxxxxxxx, New York, counsel to
Utrecht-America, Xxxxxxxxx X. Xxxxxx, General Counsel for the Issuer and
UtrechtAmerica, DeBrauw, Blackstone & Westbroek, Dutch counsel to the Issuer,
and in-house legal counsel to AMBAC, addressed to and in form and substance
reasonably acceptable to such Person. Each such Person expressly consents to the
rendering by its counsel of the opinion referred to in this Section 4.19 and
acknowledges that such opinion shall be deemed to be rendered at the request and
upon the instructions of such Person, each of whom has consulted with and has
been advised by its counsel as to the consequences of such request, instructions
and consent.
SECTION 4.20. RECORDINGS AND FILINGS. All filings and recordings listed
on Schedule 2 hereto shall have been duly made and all filing, recordation and
other fees payable in connection therewith shall have been paid; and the filing
of all precautionary financing statements under the Uniform Commercial Code of
Virginia and any other mortgages, security agreements or other documents as may
be reasonably requested by counsel to the Owner Participant, the Original Lender
or the Agent to perfect the right, title and interest of the Owner Trustee in
the Lessor's Unit 1 Interest or any part thereof or interest therein and the
Liens of the Loan Agreement and the Leasehold Mortgage thereon, shall have been
made.
SECTION 4.21. LETTER AS TO OFFEREES. The Owner Participant, the Owner
Trustee, Old Dominion, the Original Lender and the Agent shall have received a
letter from the Advisor to the Lessee in form and substance reasonably
satisfactory to each such Person with respect to the
17
number of offerees of interests in the Beneficial Interest and the Loan
Certificates and the manner of the offering of each thereof.
SECTION 5. CERTAIN COVENANTS OF THE OWNER PARTICIPANT
SECTION 5.1. RESTRICTIONS ON TRANSFER OF BENEFICIAL INTEREST. (a) The
Owner Participant covenants and agrees that it shall not directly or indirectly
assign, convey or transfer any of its right, title or interest in the Beneficial
Interest without the prior written consent of Old Dominion, so long as no Event
of Default has occurred and is continuing, and, so long as the Loans are
outstanding, the Agent; PROVIDED, HOWEVER, that the Owner Participant may
assign, convey or transfer all of its interest in the Beneficial Interest
without such consent to a Person (the "Transferee") which shall assume the
duties and obligations of the Owner Participant under the Operative Documents
pursuant to an assumption agreement substantially in the form of Exhibit O
hereto, which Transferee shall be either (i) an Affiliate of the Owner
Participant which does not otherwise qualify under clause (ii) below, provided
that all of the payment and performance obligations of the Transferee under the
Operative Documents shall be guaranteed by the Owner Participant pursuant to a
guaranty substantially in the form of Exhibit P hereto or (ii) a Person which
meets, or the payment and performance obligations of which under the Operative
Documents are guaranteed (pursuant to a guaranty substantially in the form of
Exhibit P hereto) by a Person which meets, the following criteria: (A) the
tangible net worth of the Transferee or guarantor, if any, is at least equal to
$100 million; (B) the Transferee and the guarantor, if any, is a financial
institution, corporation or business trust; (C) the Transferee will be a "United
States person" within the meaning of 7701(a)(30) of the Code; (D) so long as no
Event of Default has occurred and is continuing and except at the end of the
Term of the Equipment Operating Lease if Old Dominion has not elected to
exercise the Purchase Option, such Transferee is not a direct competitor of Old
Dominion. Notwithstanding the foregoing, the Owner Participant covenants and
agrees for the benefit of Virginia Power that it shall not directly or
indirectly assign, convey or transfer any of its right, title or interest in the
Beneficial Interest to a direct competitor (or an Affiliate thereof) of Virginia
Power without the prior written consent of Virginia Power.
(b) The Owner Participant shall give Old Dominion and the Agent 30 days
prior written notice of such transfer, or 10 days in the case of a transfer to
an Affiliate of the Owner Participant, specifying the name and address of any
proposed Transferee and such additional information as shall be necessary to
determine whether the proposed transfer satisfies the requirements of this
Section 5.1. All reasonable fees, expenses and charges of the Agent and Old
Dominion (including reasonable attorneys' fees) in connection with any such
transfer (or proposed transfer), including any of the foregoing relating to any
amendments to the Operative Documents required in connection therewith, shall be
paid by the Owner Participant, without any right of indemnification from Old
Dominion or any other Person; PROVIDED, HOWEVER, that the Owner Participant
shall have no obligation to pay such fees, expenses or charges as a result of
any transfer occasioned by an Event of Default, in which case Old Dominion shall
be obligated to pay such costs.
18
(c) Upon any such transfer in compliance with this Section 5.1, (i)
such Transferee shall be deemed the "Owner Participant" for all purposes, and
shall enjoy the rights and privileges and perform the obligations of the Owner
Participant hereunder and under each other Operative Document to which such
Owner Participant is a party, and each reference in this Agreement and each
other Operative Document to the "Owner Participant" shall thereafter be deemed
to include such Transferee for all purposes and (ii) the transferor Owner
Participant and the guarantor, if any, of such transferor Owner Participant's
obligations shall be released from all obligations hereunder and under each
other Operative Document to which such transferor or guarantor is a party or by
which such transferor Owner Participant or guarantor is bound to the extent such
obligations are expressly assumed by a Transferee; PROVIDED, HOWEVER, that in no
event shall any such transfer waive or release the transferor from any liability
existing immediately prior to or occurring simultaneously with such transfer.
SECTION 5.2. OWNER PARTICIPANT'S LIENS. The Owner Participant covenants
that it will not directly or indirectly create, incur, assume or suffer to exist
any Owner Participant's Lien and the Owner Participant shall promptly notify Old
Dominion and the Agent of the imposition of any such Lien of which the Owner
Participant has Actual Knowledge and shall promptly, at its own expense, take
such action as may be necessary to duly discharge such Owner Participant's Lien.
SECTION 5.3. AMENDMENTS OR REVOCATION OF TRUST AGREEMENT. The Owner
Participant covenants that it will not (i) amend, supplement, or otherwise
modify Section 9.01, Section 10.01 or Section 11.02 of the Trust Agreement
without the prior written consent of Old Dominion so long as no Event of Default
has occurred and is continuing or the Agent so long as the Loans are
outstanding, which consent shall not be unreasonably withheld, or (ii) revoke
the Trust Agreement without the prior written consent of Old Dominion so long as
no Event of Default has occurred and is continuing and the Agent so long as the
Loans are outstanding.
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SECTION 5.4. TRUST ESTATE. The Owner Participant covenants that
it will not voluntarily take any action to subject the Trust Estate to the
provisions of any applicable bankruptcy or insolvency law (as now or hereafter
in effect).
SECTION 5.5. APPOINTMENT OF SUCCESSOR OWNER TRUSTEE OR CO-TRUSTEES.
Notwithstanding any other provision of this Agreement, a successor Owner Trustee
or co-trustee shall not be appointed without the consent of Old Dominion and the
Agent unless such successor Owner Trustee or co-trustee (a) meets the
requirements of Section 9.03 of the Trust Agreement, and (b) is either (i)
incorporated in Massachusetts or (ii) incorporated, or has its principal place
of business, in a state other than Massachusetts and in the case of this clause
(ii) Old Dominion, the Agent and the Lenders shall have received opinions of
counsel in such state (x) in substantially the form of the opinions to be
delivered by counsel to Owner Trustee on the Closing Date at the expense of the
Owner Participant and (y) as to such other matters of the law of such state as
Old Dominion or the Agent may reasonably request, such additional matters to be
addressed at the expense of Old Dominion or the Agent, as the case may be;
PROVIDED, HOWEVER, that if the Owner Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Owner Trustee or
its properties shall be appointed or any public officer shall take charge or
control of the Owner Trustee or its property or affairs for the purpose of
rehabilitation, conservation or liquidation, the opinion required by clause
(y) shall be at the expense of Old Dominion.
SECTION 6. COVENANTS OF THE TRUST COMPANY AND THE OWNER TRUSTEE
SECTION 6.1. COMPLIANCE WITH THE TRUST AGREEMENT. The Trust Company,
in its individual capacity, hereby covenants and agrees as follows:
(a) the Trust Company will comply with all of the terms of the Trust
Agreement applicable to it; and
(b) the Trust Company will not amend, supplement, or otherwise modify
Section 9.01, Section 10.01 or Section 11.02 of the Trust Agreement without the
prior written consent of Old Dominion so long as no Event of Default has
occurred and is continuing and the Agent so long so the Loans are outstanding,
which consent shall not be unreasonably withheld.
SECTION 6.2. LESSOR'S LIENS. The Trust Company, in its individual
capacity, covenants that it will not directly or indirectly create, incur,
assume or suffer to exist any Lessor's Lien and will promptly notify Old
Dominion and the Agent of the imposition of any such Lien of which the Trust
Company has Actual Knowledge and shall promptly, at its own expense, take such
action as may be necessary to duly discharge such Lessor's Lien.
SECTION 6.3. AMENDMENTS TO OPERATIVE DOCUMENTS. The Owner Trustee
covenants that it will not, except in accordance with the Operative Documents in
effect on the date hereof (as may be amended, modified or supplemented from time
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to time in accordance with the terms hereof and of the Operative Documents), (i)
through its own action terminate any Operative Document to which it is a party,
or (ii) amend, supplement, waive or modify such Operative Documents in any
manner or take any action to prepay or refund any Loan Certificate or amend any
of the payment terms of any of the Loan Certificates without, in each case, the
prior written consent of Old Dominion so long as no Event of Default shall have
occurred and be continuing and the Agent so long as the Loans are outstanding.
SECTION 6.4. TRANSFER OF THE LESSOR'S UNIT 1 INTEREST. The Owner
Trustee covenants that it will not assign, convey or transfer any of its then
existing right, title or interest in and to the Lessor's Xxxx 0 Xxxxxxxx, xxx
Xxxxx Xxxxxx or the other Operative Documents except to a successor trustee or
Co-trustee meeting the criteria of Section 9.03 of the Trust Agreement.
SECTION 6.5. TRUST ESTATE. The Owner Trustee covenants that it
will not voluntarily take any action to subject the Trust Estate to the
provisions of any applicable bankruptcy or insolvency law (as now or hereafter
in effect).
SECTION 6.6. LIMITATION ON INDEBTEDNESS AND ACTIONS. The Owner
Trustee covenants that, so long as the Loans are outstanding, it will not incur
any indebtedness nor enter into any business or activity except as required or
expressly permitted or contemplated by any Operative Document.
SECTION 6.7. CHANGE OF LOCATION. The Trust Company, in its individual
capacity, agrees to give the Owner Participant, Old Dominion, the Lender and the
Agent written notice of any relocation of its chief executive office or the
place where documents and records relating to the Trust Estate are kept from the
location set forth in Section 3.1(i) and of any change in its name.
SECTION 7. COVENANTS OF OLD DOMINION
SECTION 7.1. MAINTENANCE OF CORPORATE EXISTENCE. Except as permitted by
Section 7.2, Old Dominion will at all times maintain its existence as a
cooperative in good standing under the laws of the Commonwealth of Virginia and
Old Dominion will remain qualified to do business in any state in which the
conduct of its business or the ownership or leasing of assets used in its
business requires such qualification and where the failure to be so qualified
would have a material adverse effect on the operations, business, properties,
assets or condition of Old Dominion and its subsidiaries taken as a whole.
SECTION 7.2. MERGER, CONSOLIDATION, SALE OF ASSETS.
Old Dominion covenants and agrees as follows:
(a) Old Dominion will not consolidate with or merge into any other
Person, or convey or transfer all or substantially all of its assets to any
Person, unless immediately after giving effect to such transaction:
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(i) the entity resulting from such consolidation, surviving in
such merger or succeeding to such assets, if other than Old Dominion,
shall be organized under the laws of the United States, any state
thereof or the District of Columbia; and
(ii) such resulting, surviving or succeeding entity, if other
than Old Dominion, shall execute and deliver to the Owner Trustee, the
Owner Participant, the Agent and the Lenders an agreement in form and
substance reasonably satisfactory to each of such parties containing an
assumption by such entity of Old Dominion's obligations under this
Participation Agreement and each other Operative Document to which Old
Dominion is then a party; no Event of Default shall have occurred and
be continuing under the Equipment Operating Lease or Foundation
Operating Lease; and Old Dominion shall have delivered to the Owner
Trustee, the Owner Participant, the Agent and the Lender an Officer's
Certificate and an opinion of counsel stating that such transaction and
such assumption agreement comply with this Section 7.2 and that all
conditions precedent to the consummation of such transaction set forth
herein have been complied with.
(b) Upon the consummation of such transaction, the surviving entity, if
other than Old Dominion, shall succeed to, and be substituted for, and may
exercise every right and power of, Old Dominion under this Participation
Agreement and each other Operative Document to which Old Dominion was a party
immediately prior to such transaction, with the same effect as if such entity
had been named herein and therein. Nothing contained herein shall permit any
sublease, assignment or other arrangement for the use, operation or possession
of the Equipment Interest or Foundation Interest except in compliance with the
applicable provisions of the Equipment Operating Lease or Foundation Operating
Lease, as the case may be.
SECTION 7.3. NOTICE OF CHANGE IN ADDRESS OR NAME. Old Dominion will
promptly provide the Owner Trustee, the Owner Participant, the Agent and the
Lender with written notice of any change in its chief executive office, its
principal place of business, its name or the place where Old Dominion maintains
its business records.
SECTION 7.4. EXERCISE OF EARLY PURCHASE OPTION UNDER POLLUTION CONTROL
ASSETS LEASE. If Old Dominion shall not have previously acquired legal title to
all of the Pollution Control Assets from the Pollution Control Assets Lessor, it
will exercise its purchase option set forth in Section 19.2 of the Pollution
Control Assets Lease to acquire all of such lessor's right, title and interest
in the Pollution Control Assets on December 30, 2004.
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SECTION 7.5. DELIVERY OF FINANCIAL STATEMENTS AND NO DEFAULT
CERTIFICATE. (a) Old Dominion will deliver to the Owner Participant, the Owner
Trustee, and, so long as the Loans are outstanding, the Agent and the Lenders,
as soon as practicable and in any event within 120 days after the end of each
fiscal year, an audited balance sheet of Old Dominion as at the end of such
fiscal year and the related statements of revenue, expenses and patronage
capital and cash flows for the year then ended, together with the report with
respect thereto of Coopers & Xxxxxxx LLP or other independent public accountants
reasonably acceptable to the Owner Trustee, the Owner Participant and the Agent,
all in reasonable detail and prepared in accordance with GAAP on a consistent
basis, and an Officer's Certificate of Old Dominion stating that (1) the signers
have made, or caused to be made under their supervision, a review of this
Agreement and the other Operative Documents to which it is then a party and (2)
such review has not disclosed the existence during such fiscal year (and the
signers do not have knowledge of the existence as of the date of such
certificate) of any condition or event constituting an Event of Default or Event
of Loss or, if any such condition or event existed or exists, specifying the
nature thereof, the period of existence thereof and what action Old Dominion has
taken or proposes to take with respect thereto.
(b) Old Dominion will deliver to the Owner Participant, the
Owner Trustee and, so long as the Loans are outstanding, the Agent and the
Lenders, (i) as soon as reasonably practicable, and in any event within 60 days
after the end of each fiscal quarter, a copy of the Form 10-Q filed by Old
Dominion with the Securities and Exchange Commission or if not so filed, such
other quarterly report as Old Dominion shall prepare, and (ii) from time to time
such other information concerning Old Dominion as such parties may reasonably
request, to the extent such information is made available to the holders of Old
Dominion's publicly traded first mortgage bonds or is filed by Old Dominion with
the Securities and Exchange Commission or any other regulatory authority having
jurisdiction over Old Dominion, other than information which is subject to a
confidentiality, or similar, request.
SECTION 7.6. QUALIFYING SECURITY. (a) At all times during the Term of
the Equipment Operating Lease Old Dominion shall, subject to the terms of this
Section 7.6, maintain for the benefit of the Owner Participant a first priority
security interest in a Qualifying Security. Old Dominion shall be permitted,
from time to time, to replace any Qualifying Security with a replacement
Qualifying Security so long as there shall be no interruption in such first
priority security interest provided by the Qualified Security in consequence of
any such optional replacement; PROVIDED that it delivers a favorable opinion of
counsel, such counsel and such opinion, in form and substance reasonably
satisfactory to the Owner Participant, regarding the validity and perfection of
the security interest. If any Qualifying Security maintained pursuant to this
Section 7.6 shall cease to be a Qualifying Security, Old Dominion shall, within
90 days of the earlier of (i) having Actual Knowledge of such fact or (ii)
receiving notice from the Owner Participant of such fact, provide (A) a first
priority security interest in a substitute Qualifying Security and (B) a
favorable opinion of counsel, such counsel and such opinion, in form and
substance reasonably satisfactory to the Owner Participant, regarding the
validity and perfection of such security interest.
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(b) Initially the Qualifying Security shall consist of the 1996 Series
A Bonds, which 1996 Series A Bonds shall be insured under the Bond Insurance
Policy issued by AMBAC. Old Dominion represents that it intends to replace the
1996 Series A Bonds with a new series of Old Dominion's Bonds insured by AMBAC
and otherwise meeting the criteria for a Qualifying Security. If Old Dominion
shall not effect such a replacement, it shall, nonetheless be obligated to
remain in full compliance with this Section 7.6. If Old Dominion shall effect
such a replacement of the Qualifying Security with a new series of Old Dominion
Bonds insured by AMBAC as contemplated by this paragraph (b), Old Dominion
agrees it will not effect an optional substitution of such replacement
Qualifying Security in accordance with the second sentence of paragraph (a) of
Section 7.6 unless such AMBAC-insured Old Dominion Bonds cease to meet the
criteria for a Qualifying Security or Old Dominion shall determine, in good
faith, that a significant possibility exists that such AMBAC-insured Old
Dominion Bonds may cease to constitute a Qualifying Security.
SECTION 7.7. QUALIFYING LETTER OF CREDIT. If at any time during the
Term of the Equipment Operating Lease or the Foundation Operating Lease Old
Dominion's Bonds are not rated (i) at least A- by S&P and A3 by Xxxxx'x or (ii)
at least A by S&P and Baa1 by Xxxxx'x and, in the case of this clause (ii), if
rated A by S&P then S&P has not, and if rated Baa1 by Xxxxx'x then Xxxxx'x has
not, made any public announcement that any such organization has the rating of
the Old Dominion's Bonds under surveillance or review with negative implications
(such credit ratings under clause (i) or (ii) above are herein called the
"Minimum Credit Ratings"), Old Dominion shall, within 90 days of the date on
which the Old Dominion's Bonds are rated below the Minimum Credit Ratings,
obtain for the benefit of the Owner Participant a Qualifying Letter of Credit.
If at any time subsequent to such date, Old Dominion's Bonds satisfy the
criteria in either clause (i) or (ii) of the preceding sentence, Old Dominion
shall not be required to maintain a Qualifying Letter of Credit in accordance
with this Section 7.7. If, at any time Old Dominion is required to maintain a
Qualifying Letter of Credit pursuant to this Section 7.7, the bank issuing such
Qualifying Letter of Credit shall cease to be a Qualifying Letter of Credit
Bank, Old Dominion shall, within 90 days of the earlier of (i) having Actual
Knowledge of such fact or (ii) receiving notice from the Owner Participant of
such fact, replace such letter of credit with a Qualifying Letter of Credit.
SECTION 7.8. INFORMATION CONCERNING CLOVER UNIT 1. Old Dominion shall
furnish the Owner Trustee and the Owner Participant and their respective
authorized representatives from time to time such information as such party
shall reasonably request concerning Clover Unit 1 and the Clover Real Estate,
including information concerning the condition, operation, maintenance and use
of Clover Unit 1, to the extent Old Dominion possesses such information or can
obtain such information under the Clover Agreements. To the extent such
information consists of information contained in records kept by Old Dominion or
Virginia Power, it shall be furnished without cost to the Owner Trustee.
Notwithstanding the foregoing, neither the Owner Trustee nor the Owner
Participant shall have any duty to make any inquiry permitted by this Section
7.8, nor shall either the Owner Trustee or the Owner Participant incur any
obligation or liability by reason of not making such inquiry.
SECTION 7.9. FURTHER ASSURANCES. Old Dominion, at its own cost, expense
and liability, will cause to be promptly and duly taken, executed, acknowledged
24
and delivered all such further acts, documents and assurances as may be
necessary in order to carry out the intent and purposes of this Participation
Agreement and the other Operative Documents, and the transactions contemplated
hereby and thereby. Old Dominion, at its own cost, expense and liability, will
cause such financing statements and fixture filings (and continuation statements
with respect thereto) and such other documents as the Owner Participant, the
Owner Trustee or the Agent shall reasonably request to be recorded or filed at
such places and times in such manner, and will take all such other reasonable
actions or cause such actions to be taken, as may be necessary in order to
establish, preserve, protect and perfect the right, title and interest of the
Owner Trustee in and to (i) the Equipment Head Lease Interest, the Foundation
Head Lease Interest, the Clover Real Estate or any part thereof or interest
therein and the Liens of the Leasehold Mortgage and Loan Agreement thereon and
(ii) the Deposit and the Qualifying Security and the Liens of the Security
Agreements thereon. Old Dominion shall promptly from time to time furnish to the
Owner Participant or the Owner Trustee such information as may be required to
enable the Owner Participant or the Owner Trustee, as the case may be, to timely
file with any Governmental Entity any reports and obtain any licenses or permits
required to be filed or obtained by the Owner Trustee under any Operative
Document or the Owner Participant as the owner of the Beneficial Interest.
SECTION 7.10. POLLUTION CONTROL ASSETS LEASE. Old Dominion agrees that
it will not supplement or amend the Pollution Control Assets Lease in any manner
which adversely affects the rights or interest of the Owner Trustee, the Owner
Participant, the Agent or any Lender;
SECTION 7.11. LOAN CERTIFICATES. Old Dominion covenants that it will
not purchase or own any Loan Certificates.
SECTION 7.12. TAX TREATMENT OF BASIC RENT AND FOUNDATION BASIC RENT.
Old Dominion covenants that for federal income tax purposes it will report as
income the payments by the Bank under Section 3.1 of the Payment Undertaking
Agreement other than amounts representing a return of capital and will report as
a rental expense Old Dominion's obligations for Basic Rent and Foundation Basic
Rent under Section 3.2 of the Equipment Operating Lease and Section 3.2 of the
Foundation Operating Lease, provided there is no change in Applicable Law
affecting the federal income tax treatment of these items.
SECTION 8. OLD DOMINION'S INDEMNIFICATIONS
SECTION 8.1. GENERAL INDEMNITY
(a) CLAIMS INDEMNIFIED. Subject to the exclusions stated in paragraph
(b) below, Old Dominion agrees to indemnify, protect, defend and hold harmless,
and does hereby indemnify the Owner Trustee, the Trust Company in its individual
capacity, the Trust Estate, the Owner Participant, any Lender and the Agent and
their respective Affiliates successors, assigns, agents, directors, officers or
employees (each an "Indemnitee") against any and all Claims imposed on, incurred
by or asserted against any Indemnitee in any way relating to or resulting from
or arising out of or attributable to:
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(i) the construction, financing, refinancing, acquisition,
operation, warranty, ownership, possession, maintenance, repair, lease,
condition, alteration, modification, restoration, refurbishing, return,
decommissioning, sale or other disposition, insuring, sublease, or
other use or non-use of Clover Unit 1, the Real Property, the Equipment
Interest, the Foundation Interest, the Ground Interest (if applicable),
or the Lessor's Unit 1 Interest, or any portion or Component thereof or
any interest therein;
(ii) the conduct of the business or affairs of Old Dominion or
Clover Unit 1;
(iii) the manufacture, design, purchase, acceptance,
rejection, delivery or condition of, or improvement to, Clover Xxxx 0,
the Equipment Interest or the Foundation Interest, Ground Interest (if
applicable), or any portion or Component thereof or any interest
therein;
(iv) the Equipment Head Lease, the Equipment Operating Lease,
the Foundation Head Lease, the Foundation Operating Lease, the
Pollution Control Assets Lease, the Clover Agreements (including,
without limitation, any claims arising out of any consent by, or right
of first refusal of, Virginia Power or supplements or amendments to the
Clover Agreements made without the consent of the Owner Trustee), the
Old Dominion Indenture or any other Operative Document, the execution
or delivery thereof or the performance, enforcement or amendment of any
terms thereof;
(v) the sale of the Loan Certificates or any refinancing
thereof pursuant to Section 10 hereof;
(vi) the establishment or maintenance of the Qualifying
Security, the Qualifying Letter of Credit or the Deposit;
(vii) the reasonable costs and expenses of the Transaction
Parties in connection with amendments to the Operative Documents;
(viii) the non-performance or breach by Old Dominion of any
obligation or warranty contained in this Agreement or any other
Operative Document or the falsity of any representation of Old Dominion
contained in the Agreement or any other Operative Document;
(ix) the continuing fees and expenses of the Owner Trustee
(including the reasonable compensation and expenses of its counsel,
accountants and other professional persons) arising out of the Owner
Trustee's discharge of its duty under the Operative Documents;
(x) for the benefit of any Lender and the Agent only, a breach
of Section 5.1 or 6.4 hereof resulting from the transfer of the
Beneficial Interest or the Trust Estate to a Person that is not a
"United States person" within the meaning of section 7701(a)(30) of the
Code;
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(xi) for the benefit of the Owner Participant and the Owner
Trustee only, any breach by a Lender of Section 3.4(a)(i) hereof,
resulting in the occurrence of a non-exempt "prohibited transaction"
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) in connection with the acquisition or holding of any Loan
Certificate by any such Lender;
(xii) the payment of all amounts provided for in Section
15.3(c) of the Equipment Operating Lease; and
(xiii) the payment of any Break Costs occasioned by the
replacement of the Payment Undertaking Agreement pursuant to Section
11(A) of the Participation Agreement.
(b) CLAIMS EXCLUDED. The following are excluded from Old Dominion's
agreement to indemnify any Indemnitee under this Section 8.1:
(i) any Claim attributable to acts, omissions or events
occurring after the earlier of (x) the return of the Lessor's Unit 1
Interest in full compliance of Section 5 of the Equipment Operating
Lease and Section 5 of the Foundation Operating Lease, if applicable,
or (y) the expiration or earlier termination of the Equipment Operating
Lease and the Foundation Operating Lease in compliance with the terms
thereof under circumstances not requiring the return of the Lessor's
Unit 1 Interest, unless and to the extent such Claim is attributable to
actions, omissions or events occurring in connection with the exercise
of remedies pursuant to Section 17 of the Equipment Operating Lease or
Section 17 of the Foundation Operating Lease, as the case may be,
following the occurrence, and during the continuance, of an Event of
Default thereunder;
(ii) any Claim that is a Tax, or is a cost of contesting a Tax
(other than amounts payable under this Section which are required to be
paid on an After Tax Basis), or (subject to paragraph (d) below)
otherwise arises from a Tax, whether or not Old Dominion is required to
indemnify therefor under Section 8.2 hereof or the Tax Indemnity
Agreement (other than an indemnity payable to the Lender or the Agent
under Section 8.1(a)(x) hereof);
(iii) with respect to any Indemnitee, any Claim attributable
to the gross negligence or wilful misconduct of such Indemnitee or any
Affiliate thereof or any of their respective successors, assigns,
agents, directors, officers or employees unless attributable to (a) any
breach by Old Dominion or its Affiliates of any covenant,
representation or warranty contained in any Operative Document or (b)
any breach by any other Transaction Party or its Affiliates of any
covenant, representation or warranty contained in any Operative
Document;
(iv) as to any Indemnitee, any Claim attributable to the
noncompliance of such Indemnitee or any of its Affiliates or any of
their respective directors, officers or employees, with any of the
terms of, or any misrepresentation or breach of warranty by such
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Indemnitee or any of its Affiliates or any of their respective
directors, officers or employees contained in any Operative Document by
which such Indemnitee is bound or any breach by such Indemnitee or any
of its Affiliates or any of their respective successors, assigns,
agents, directors, officers or employees of any covenant contained in
any Operative Document by which such Indemnitee is bound unless
attributable to (a) any breach by Old Dominion or its Affiliates of any
covenant, representation or warranty contained in any Operative
Document or (b) any breach by any other Transaction Party or its
Affiliates of any covenant, representation or warranty contained in any
Operative Document;
(v) as to any Indemnitee or its Affiliates or their respective
successors, assigns, agents, directors, officers or employees, any
Claim attributable to the offer, sale, assignment, transfer or other
disposition (voluntary or involuntary) by or on behalf of such
Indemnitee of its interest (whether direct or beneficial) in any
Operative Document or in the Lessor's Unit 1 Interest or the Trust
Estate, other than a transfer by such Indemnitee required by the terms
of an Operative Document or any transfer during the continuance of an
Event of Default;
(vi) except in the case of the Lender or the Agent, any Claim
constituting or arising from a Lessor's Lien;
(vii) except in the case of the Trust Company (in its
individual capacity), any Lender or the Agent, any claim constituting
or arising from an Owner Participant's Lien;
(viii) as to any Indemnitee or its Affiliates or their
respective successors, assigns, agents, directors, officers or
employees, any Claim attributable to the authorization or giving, or
withholding, by such Indemnitee of any amendment, supplement, waiver or
consent with respect to any Operative Document, except as a result of
any misrepresentation of Old Dominion or as expressly requested by Old
Dominion or required by Applicable Laws or the Clover Agreements or
required to effectuate the terms of the Operative Documents (but not if
such required action results from any breach by such Indemnitee or any
of its Affiliates or any of their respective successors, assigns,
agents, directors, officers or employees of its obligations
thereunder);
(ix) any Claim relating to the payment of any amount which
constitutes Transaction Costs which Owner Trustee or Owner Participant
is obligated to pay pursuant to Section 2.4(a) hereof or any other
amount to the extent such Indemnitee or any of its Affiliates or any of
their respective successors, assigns, agents, directors, officers or
employees has expressly agreed in any Operative Document to pay such
amount without express right of reimbursement; and
(x) in the case of the Owner Trustee and the Owner
Participant, any failure on the part of the Owner Trustee to distribute
in accordance with the Trust Agreement any amounts received and
distributable by it thereunder.
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(c) INSURED CLAIMS. In the case of any Claim indemnified by Old
Dominion hereunder which is covered by a policy of insurance maintained by Old
Dominion, Owner Trustee agrees to cooperate, at the sole cost and expense of Old
Dominion, with insurers in exercise of their rights, to investigate, defend or
compromise such Claim.
(d) AFTER-TAX BASIS. Old Dominion agrees that any payment or indemnity
pursuant to this Section 8.1 in respect of any Claim shall be made to the
Indemnitee of such payment or indemnity on an After-Tax Basis.
(e) CLAIMS PROCEDURE. Each Indemnitee shall promptly after such
Indemnitee shall have Actual Knowledge thereof notify Old Dominion of any Claim
as to which indemnification is sought; PROVIDED, that the failure so to notify
Old Dominion shall not reduce or affect Old Dominion's liability which it may
have to such Indemnitee under this Section 8.1, except to the extent that Old
Dominion shall be prejudiced in defending any such Claim as a result of such
failure but only to the extent of such increase caused by such failure. Any
amount payable to any Indemnitee pursuant to this Section 8.1 shall be paid
within thirty (30) days after receipt of such written demand therefor from such
Indemnitee, accompanied by a certificate of such Indemnitee stating in
reasonable detail the basis for the indemnification thereby sought and (if such
Indemnitee is not a party hereto) an agreement to be bound by the terms hereof
as if such Indemnitee were such a party. Promptly after Old Dominion receives
notification of such Claim accompanied by a written statement describing in
reasonable detail the Claims which are the subject of and basis for such
indemnity and the computation of the amount so payable, Old Dominion shall
notify such Indemnitee whether it intends to pay, object to, compromise or
defend any matter involving the asserted liability of such Indemnitee. Old
Dominion shall have the right to investigate and so long as no Event of Default
shall have occurred and be continuing, Old Dominion shall have the right (so
long as it has acknowledged in writing its obligation to indemnify pursuant to
this Section 8.1; PROVIDED, HOWEVER, Old Dominion shall not be bound by its
acknowledgement of liability if and to the extent that a court shall determine
in writing with reference to such Claim that Old Dominion is not otherwise
liable under this Section 8.1 with respect to such Claim) in its sole
discretion, to defend or compromise any Claim for which indemnification is
sought under this Section 8.1; PROVIDED that no such defense or compromise shall
involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a Lien on any part of the Equipment Interest, the Foundation
Interest or the Trust Estate or the impairment of Clover Unit 1 in any material
respect or (ii) any criminal liability being incurred or any material adverse
effect on such Indemnitee. If Old Dominion elects, subject to the foregoing, to
compromise or defend any such asserted liability, it may do so at its own
expense and by counsel selected by it. Upon Old Dominion's election to
compromise or defend such asserted liability and prompt notification to such
Indemnitee of its intent to do so, such Indemnitee shall cooperate at Old
Dominion's expense with all reasonable requests of Old Dominion in connection
therewith and will provide Old Dominion with all information not within the
control of Old Dominion as is reasonably available to such Indemnitee which Old
Dominion may reasonably request. Where Old Dominion, or the insurers under a
policy of insurance maintained by Old Dominion, undertake the defense of such
Indemnitee with respect to a Claim, no additional legal fees or expenses of such
Indemnitee in connection with the defense of such Claim shall be indemnified
hereunder unless such fees or expenses were incurred at the request of Old
Dominion or such insurers. Notwithstanding the foregoing, an Indemnitee may
participate at its own expense in any judicial proceeding controlled by Old
Dominion pursuant to the preceding provisions; PROVIDED, HOWEVER, that such
party's participation does not in the reasonable opinion of independent counsel
to Old Dominion interfere with such control; PROVIDED, FURTHER, that if and to
the extent that (i) such Indemnitee is advised by counsel that an actual or
potential material conflict of interest exists where it is advisable for such
Indemnitee to be represented by separate counsel or (ii) there is a risk that
such Indemnitee may be indicted or otherwise charged in a criminal complaint and
such Indemnitee informs Old Dominion that such Indemnitee desires to be
represented by separate counsel, such Indemnitee shall have the right to control
its own defense of such Claim and the reasonable fees and expenses of such
separate counsel shall be borne by Old Dominion. No Indemnitee shall enter into
any settlement or other compromise with respect to any Claim without the prior
written consent of Old Dominion, but only insofar as the Owner Trustee shall not
have commenced the exercise of remedies pursuant to Section 17 of the Equipment
Operating Lease or Section 17 of the Foundation Operating Lease, as the case may
be, following which such Indemnitee may enter into such settlement or compromise
without such consent.
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(f) SUBROGATION. To the extent that a Claim indemnified by Old Dominion
under this Section 8.1 is in fact paid by Old Dominion or an insurer under an
insurance policy maintained by Old Dominion, Old Dominion or such insurer shall
be subrogated to the rights and remedies of the Indemnitee on whose behalf such
Claim was paid to the extent of such payment (other than rights of such
Indemnitee under insurance policies maintained at its own expense) with respect
to the transaction or event giving rise to such Claim. Should an Indemnitee
receive any refund, in whole or in part, with respect to any Claim paid by
Old Dominion hereunder, it shall promptly pay the amount refunded (but
not an amount in excess of the amount Old Dominion or any of its insurers has
paid in respect of such Claim) over to Old Dominion.
(g) MINIMIZE CLAIMS. The Owner Participant, the Owner Trustee and the
Lenders will use their respective reasonable efforts to minimize Claims
indemnifiable by Old Dominion under this Section 8.1, including by complying
with reasonable requests by Old Dominion to do or to refrain from doing any act
if such compliance is, in the good faith opinion of the Owner Participant or a
Lender, as the case may be, of a purely ministerial nature or otherwise has no
unindemnified adverse impact on the Owner Participant, Owner Trustee or a
Lender, as the case may be, or any Affiliate of either thereof or on the
business or operations of any of the foregoing.
SECTION 8.2. GENERAL TAX INDEMNITY
(a) INDEMNITY. Except as provided in paragraph (b), Old Dominion agrees
to indemnify, on an After-Tax Basis, each of the Owner Trustee, the Trust
Company in its individual capacity, the Trust Estate, the Owner Participant, the
Agent and the Lender, their respective successors and assigns, and the
Affiliates of each of the foregoing (each a "Tax Indemnitee") for and to hold
each Tax Indemnitee harmless from and against all Taxes that are imposed upon
any Tax Indemnitee, Clover Unit 1 or the Lessor's Unit 1 Interest, or any
portion or Component thereof or any interest therein, or upon any Operative
Document or interest therein, arising out of, in connection with or relating to,
any of the following:
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(i) the construction, financing, refinancing, acquisition,
operation, warranty, ownership, possession, maintenance, repair, lease,
condition, alteration, modification, restoration, refurbishing, return,
sale or other disposition, insuring, sublease, or other use of Clover
Unit 1 or any portion or Component thereof or any interest therein;
(ii) the manufacture, design, purchase, acceptance,
rejection, delivery or condition of, or improvement to, Clover Unit 1,
or any portion or Component thereof or any interest therein;
(iii) the conduct of the business or affairs of Old
Dominion or Clover Unit 1;
(iv) the Equipment Operating Lease, the Foundation Operating
Lease, the Pollution Control Assets Lease, the Clover Agreements
(including without limitations, any claim arising out of any consent
by, or right of first refusal of, Virginia Power), the Old Dominion
Indenture, the Loan Certificates or any other Operative Document, the
execution or delivery thereof, or the performance, enforcement or
amendment of the terms thereof; or
(v) the payment or receipt of Basic Rent, Foundation Basic
Rent, Supplemental Rent, Foundation Supplemental Rent or any other
amount paid or payable by or to any Person pursuant to the Operative
Documents.
(b) EXCLUDED TAXES. The indemnity provided for in paragraph (a) above
shall not extend to any of the following Taxes (the "Excluded Taxes"):
(i) Taxes (other than any sales, use, value added, property or
transfer Taxes or Taxes in the nature thereof) imposed by any
government or taxing authority which are imposed on, based on or
measured by (I) net income (including any minimum taxes or taxes on
items of tax preference), or (II) gross income, net or gross receipts,
net or gross rent, capital or net worth;
(ii) Capital gain, accumulated earnings, withholding, personal
holding company, excess profits, succession or estate, minimum,
alternative minimum, preference, franchise, conduct of business, other
similar Taxes and Taxes in the nature thereof (other than any sales,
use, value added, property or transfer Taxes or Taxes in the nature
thereof ) imposed by any government or taxing authority;
(iii) Taxes attributable to any period after the expiration or
earlier termination of the Equipment Operating Lease and the Foundation
Operating Lease and return of the Equipment Interest and the Foundation
Interest to the Owner Trustee not attributable to an Event of Default;
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(iv) Taxes imposed with respect to a Tax Indemnitee or any
transferee or assignee of any such Tax Indemnitee that result from the
breach by such Tax Indemnitee or such transferee or assignee, as the
case may be, or any Affiliate thereof of any of its representations,
warranties or covenants in any of the Operative Documents or the gross
negligence, willful misconduct or fraud of such Tax Indemnitee or such
transferee or assignee, as the case may be, or any Affiliate;
(v) Taxes imposed on the Owner Participant, the Owner Trustee
or the Trust Estate arising out of, or caused by, any assignment, sale,
transfer or other disposition (i) by the Owner Participant of its
Beneficial Interest or a portion thereof or any interest in any
Operative Document, (ii) by the Owner Trustee of the Lessor's Unit 1
Interest or any portion or Component thereof or interest therein, any
Operative Document, or any interest in or arising under any of the
foregoing or (iii) of any interest in a Owner Participant, other than a
disposition (x) in connection with the exercise of remedies upon an
Event of Default under the Equipment Operating Lease or the Foundation
Operating Lease or (y) pursuant to the terms of the Operative Documents
(other than a disposition of any Severable Modification purchased by
Owner Trustee pursuant to Section 8.3 of the Equipment Operating Lease
or Section 8.3 of the Foundation Operating Lease or a disposition to a
Person other than Old Dominion unless pursuant to Section 14 of the
Equipment Operating Lease and Section 14 of the Foundation Operating
Lease);
(vi) Taxes, imposed on the Owner Participant, the Owner
Trustee or the Trust Estate arising in connection with, or as a result
of, Lessor's Liens or Owner Participant's Liens;
(vii) Taxes, imposed on the Owner Participant, the Owner
Trustee or the Trust Estate arising in connection with a Regulatory
Event of Loss caused by the action, inaction or status (unless caused
by a change of law) of the Owner Trustee, the Owner Participant or an
Affiliate thereof;
(viii) Otherwise indemnifiable Taxes imposed against a
transferee or assignee of any Tax Indemnitee to the extent of the
excess of such otherwise indemnifiable Taxes over the amount of such
Taxes that would have been imposed on such Tax Indemnitee;
(ix) Taxes that are included in the Equipment Interest
Cost, the Foundation Interest Cost or the Transaction Costs;
(x) Taxes imposed on the Owner Trustee with respect to
any fees or other compensation received by the Owner Trustee in its
capacity as such;
(xi) Taxes that would not have been imposed but for the
failure of a Tax Indemnitee to comply with certification, information,
documentation, reporting or other similar requirements concerning the
nationality, residence, identity, connection with the jurisdiction
imposing such Taxes or other similar matters; PROVIDED that the
foregoing exclusion shall only apply if (i) such Tax Indemnitee shall
have been given timely written notice of such requirement by Old
Dominion, and (ii) such Tax Indemnitee shall have determined that
compliance with such requirement will not have, or create any material
risk of having, any adverse consequence to such Tax Indemnitee or any
Affiliate thereof that is not indemnified against by Old Dominion to
the reasonable satisfaction of the Tax Indemnitee;
(xii) Taxes that would not have been imposed but for the
failure of the Tax Indemnitee to comply with the contest provisions of
paragraph (g) below, to the extent Old Dominion is actually prejudiced
in defending any such claim as a result of such failure;
(xiii) Taxes imposed by any government or taxing authority,
other than any government or taxing authority of or in the United
States, which are not imposed as a result of (A) the location, use,
operation or Clover Unit 1 or any portion or Component thereof in the
relevant jurisdiction, (B) the organization or presence of Old Dominion
or any Lessee Person in the relevant jurisdiction, (C) the making or
receipt of any payment by Old Dominion or any Lessee Person in the
relevant jurisdiction or (D) the Pollution Control Assets Lease;
(xiv) Taxes imposed on any Tax Indemnitee that would not have
been imposed but for an amendment to any Operative Document authorized,
executed or otherwise consented to by such Tax Indemnitee that was not
consented to by Old Dominion where such consent was required by the
Operative Documents;
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(xv) Taxes in the nature of an intangibles tax imposed by any
United States federal, state or local government or taxing authority
upon or with respect to the interest of the Owner Participant in the
trust created under the Trust Agreement or the Trust Estate;
(xvi) Taxes imposed on the Owner Participant that would not
have been imposed but for the trust created under the Trust Agreement
or the Owner Participant being (A) organized under the laws of a
jurisdiction other than the United States or any state thereof, (B)
treated as a person that is not a United States person under section
7701 of the Code, or (C) in the case of the trust created under the
Trust Agreement, taxed as other than a grantor trust;
(xvii) Taxes based on or measured by the value of the interest
of a Lender in any Loan Certificate (other than Taxes imposed by the
Commonwealth of Virginia); and
(xviii) Taxes that are expressly by their terms in
substitution of any of the foregoing Excluded Taxes.
The Owner Participant and Owner Trustee will use their respective reasonable
efforts to minimize Taxes indemnifiable by Old Dominion under this Section 8.2,
including by complying with reasonable requests by Old Dominion to do or to
refrain from doing any act if such compliance is, in the good faith opinion of
the Owner Participant, of a purely ministerial nature or otherwise has no
unindemnified adverse impact on the Owner Participant or Owner Trustee or any
Affiliate of either thereof or on the business or operations of any of the
foregoing.
(c) PAYMENT. Each payment required to be made by Old Dominion to a Tax
Indemnitee pursuant to paragraph (a) shall be paid in immediately available
funds by the later of (A) 10 Business Days following Old Dominion's receipt of
the Tax Indemnitee's written demand for the payment (which demand shall be
accompanied by an Officer's Certificate of the Tax Indemnitee describing in
reasonable detail the Taxes for which the Tax Indemnitee is demanding indemnity
and the computation of such Taxes), (B) the date which is five Business Days
prior to the date on which such Taxes are required to be paid to the applicable
taxing authority, (C) subject to paragraph (g) below, in the case of amounts
which are being contested pursuant to such paragraph (g), at the time and in
accordance with a final determination of such contest (including all appeals
permitted hereby and by law; PROVIDED that no Tax Indemnitee shall be required
to pursue any appeal to the United States Supreme Court), or (D) in the case of
any indemnity demand for which Old Dominion has requested review and
determination pursuant to paragraph (d) below, the completion of such review and
determination. Any amount payable to Old Dominion pursuant to paragraph (e) or
(f) below shall be paid promptly after the Tax Indemnitee realizes a Tax Benefit
(determined using the same assumptions set forth in the second sentence under
the definition of After-Tax Basis) giving rise to a payment under paragraph (e)
or receives a refund or credit giving rise to a payment under paragraph (f), as
the case may be, and shall be accompanied by an Officer's Certificate of the Tax
Indemnitee computing in reasonable detail the amount of such payment. Upon the
final determination of any contest pursuant to paragraph (g) below in respect of
any Taxes for which Old Dominion has made a
33
Tax Advance, the amount of Old Dominion's obligation under paragraph (a) above
shall be determined as if such Tax Advance had not been made. Any obligation of
Old Dominion under this Section 8.2 and the Tax Indemnitee's obligation to repay
the Tax Advance will be satisfied first by set off against each other, and any
difference owing by either party will be paid within 10 days of such final
determination, but not prior to the date determined in accordance with the first
sentence of this paragraph (c).
(d) INDEPENDENT EXAMINATION. Within 15 days after Old Dominion receives
any computation from the Tax Indemnitee, Old Dominion may request in writing
that an independent public accounting firm selected by the Tax Indemnitee and
reasonably acceptable to Old Dominion review and determine on a confidential
basis the amount of any indemnity payment by Old Dominion to the Tax Indemnitee
pursuant to paragraph (a) above or any payment by a Tax Indemnitee to Old
Dominion pursuant to paragraph (e) or (f) below. The Tax Indemnitee shall
cooperate with such accounting firm and supply it with all documentation and
records necessary for the accounting firm to conduct such review and
determination (including relevant data from the Indemnitee's income tax returns
but not such returns themselves), PROVIDED that such accounting firm shall agree
in writing in a manner satisfactory to the Tax Indemnitee to maintain the
confidentiality of such information. The parties hereto agree that the
independent public accounting firm's sole responsibility shall be to verify the
computation of any payment pursuant to this Section 8.2 and that matters of
interpretation of this Participation Agreement or any other Operative Document
are not within the scope of the independent accountant's responsibility. The
fees and disbursements of such accounting firm will be paid by Old Dominion,
PROVIDED that such fees and disbursements will be paid by the Tax Indemnitee if
the verification results in an adjustment in Old Dominion's favor of ten percent
or more of the net present value (using a discount rate equal to the rate of
interest on underpayments of federal income tax for the period in question and
calculating such value as of the date such payment becomes due and payable under
this Agreement) of the indemnity payment or payments computed by the Tax
Indemnitee.
(e) TAX BENEFIT. If, as the result of any Taxes paid or indemnified
against by Old Dominion under this Section 8.2, the aggregate Taxes paid by the
Tax Indemnitee for any taxable year are less (whether by reason of a deduction,
credit, allocation or apportionment of income or otherwise) than the amount of
such Taxes that otherwise would have been payable by such Tax Indemnitee (a "Tax
Benefit"), then to the extent such Tax Benefit was not taken into account in
determining the amount of indemnification payable by Old Dominion under
paragraph (a) above, such Tax Indemnitee shall pay to Old Dominion (y) the
amount of such Tax Benefit, plus (z) an amount equal to any United States
federal, state or local income tax benefit resulting from the payment under
clause (y) above (determined using the same assumptions as set forth in the
second sentence under the definition of After-Tax Basis). If it is subsequently
determined that the Tax Indemnitee was not entitled to such Tax Benefit, the
portion of such Tax Benefit that is repaid or recaptured will be treated as
Taxes for which Old Dominion must indemnify the Tax Indemnitee pursuant to this
Section 8.2 without regard to paragraph (b) hereof.
(f) REFUND. If a Tax Indemnitee obtains a refund or credit of all or
part of any Taxes paid, reimbursed or advanced by Old Dominion pursuant to this
Section 8.2, the Tax Indemnitee
34
promptly shall pay to Old Dominion the amount of such refund or credit plus or
minus any net tax benefit or detriment realized by such Tax Indemnitee as a
result of any payment by such Tax Indemnitee made pursuant to this sentence
(taking into account any Taxes incurred by such Tax Indemnitee by reason of the
receipt or accrual of such refund or credit as well as any Tax benefits or
credits by reason of such payment to Old Dominion (determined using the same
assumptions as set forth in the second sentence under the definition of
After-Tax Basis)), PROVIDED that (A) if at the time such payment is due to Old
Dominion a Payment Default or an Event of Default under the Equipment Operating
Lease or the Foundation Operating Lease shall have occurred and be continuing,
such amount shall not be payable until such Payment Default or Event of Default
under the Equipment Operating Lease or the Foundation Operating Lease has been
cured, and (B) the amount payable to Old Dominion pursuant to this sentence (net
of any amount in respect of any tax benefit realized by reason of the payment
hereunder) shall not exceed the amount of the indemnity payment in respect of
such refunded or credited Taxes that was made by Old Dominion (net of any amount
that was necessary to make such payment on an After-Tax Basis). If, in
connection with a refund or credit of all or part of any Taxes paid, reimbursed
or advanced by Old Dominion pursuant to this Section 8.2, a Tax Indemnitee
receives an amount representing interest on such refund or credit, the Tax
Indemnitee promptly shall pay to Old Dominion the amount of such interest that
shall be fairly attributable to such Taxes paid, reimbursed or advanced by Old
Dominion prior to the receipt of such refund or credit net of Taxes payable in
respect of such receipt. If it is subsequently determined that the Tax
Indemnitee was not entitled to such refund or credit, the portion of such refund
or credit that is repaid or recaptured will be treated as Taxes for which Old
Dominion must indemnify the Tax Indemnitee pursuant to this Section 8.2 without
regard to paragraph (b) hereof.
(g) CONTEST.
(1) Notice of Contest. If a written claim for payment is made
by any taxing authority against a Tax Indemnitee for any Taxes with
respect to which Old Dominion may be liable for indemnity hereunder (a
"Tax Claim"), such Tax Indemnitee shall give Old Dominion written
notice of such Tax Claim as soon as practicable, and in no event more
than 30 days after its receipt, and shall furnish Old Dominion with
copies of such Tax Claim and all other writings received from the
taxing authority relating to such claim, PROVIDED that failure so to
notify Old Dominion within such 30-day period shall not relieve Old
Dominion of any obligation to indemnify the Tax Indemnitee hereunder
except to the extent Old Dominion is actually prejudiced in defending
such Tax Claim as a result of such failure. The Tax Indemnitee shall
not pay such Tax Claim until at least 30 days after providing Old
Dominion with such written notice, unless required to do so by law or
regulation.
(2) Control of Contest. Subject to Subsection (g)(3) below,
Old Dominion will be entitled to contest, and control the contest of,
any Tax Claim if such Tax Claim may be and is segregated procedurally
from tax claims for which Old Dominion is not obligated to indemnify
the Tax Indemnitee, PROVIDED that Old Dominion shall use its best
efforts to contest such Tax Claim in its own name and if it is
contesting the Tax Claim in the Tax Indemnitee's name, it shall consult
with such Tax Indemnitee with respect to
35
the contest of such Tax Claim. In the case of a Tax Claim that Old
Dominion is not entitled to contest, or that Old Dominion and the Tax
Indemnitee otherwise agree that the Tax Indemnitee shall contest:
(i) the Tax Indemnitee will contest and control such
Tax Claim in good faith,
(ii) at Old Dominion's written request, if payment is
made to the applicable taxing authority, the Tax Indemnitee
shall use reasonable efforts to obtain a refund thereof in
appropriate administrative or (subject to the proviso in the
parenthetical clause in subparagraph (C) of paragraph (c)
above) judicial proceedings,
(iii) the Tax Indemnitee shall consult with and keep
reasonably informed Old Dominion and its designated counsel
with respect to such Tax Claim, shall timely provide Old
Dominion with copies of the relevant portions of all documents
relating to such Tax Claim, and shall consider and consult
with Old Dominion concerning any request by Old Dominion to
(a) resist payment of Taxes demanded by the taxing authority
in connection with such Tax Claim if practical and (b) not pay
such Taxes except under protest if protest is necessary and
proper,
(iv) the Tax Indemnitee will not, without Old
Dominion's prior written consent (not unreasonably to be
withheld), forego any administrative appeal, proceeding,
hearing or conference if doing so would preclude as a matter
of law initiating or contesting further such Tax Claim, and
(v) the Tax Indemnitee shall not otherwise settle,
compromise or abandon such contest without Old Dominion's
prior written consent (not unreasonably to be withheld) except
as provided in paragraph (g)(4) below.
(3) Conditions of Contest. Notwithstanding the foregoing, no
contest with respect to a Tax Claim will be required pursuant to this
Section 8.2, and Old Dominion shall be required to pay the applicable
Taxes without contest, unless:
(i) within 30 days after notice by the Tax Indemnitee
to Old Dominion of such Tax Claim, Old Dominion shall request
in writing that such Tax Claim be contested, PROVIDED that if
a shorter period is required for taking action with respect to
such Tax Claim and the Tax Indemnitee notifies Old Dominion of
such requirement, Old Dominion shall use reasonable best
efforts to request such contest within such shorter period,
(ii) no Payment Default or Event of Default under
the Equipment Operating Lease or the Foundation Operating
Lease has occurred and is continuing,
36
(iii) there is no risk of sale, forfeiture or loss
of, or the creation of a Lien on Clover Unit 1 or any
Component thereof as a result of such Tax Claim, PROVIDED that
this clause (iii) shall not apply so long as the long term
unsecured debt of the guarantor shall be rated at least Baa3
by Xxxxx'x or BBB- by S&P, or if either of such entities no
longer rates the guarantor's long term, unsecured debt, a
comparable "investment grade" rating by a successor national
rating agency rating the guarantor's long term unsecured debt;
and PROVIDED, FURTHER, that if at any time the foregoing
credit standard is not met, Old Dominion shall no longer be
entitled to contest or to continue any existing contest of any
matter unless Old Dominion shall post security satisfactory to
the Tax Indemnitee,
(iv) if such contest involves payment of such Tax,
Old Dominion will either advance to the Tax Indemnitee on an
interest-free basis (without reduction for any Tax savings
that the Tax Indemnitee may realize as a result of the payment
of such Tax) and without after-tax cost to such Tax Indemnitee
or the Owner Participant, which advance will be repaid in full
by the Tax Indemnitee upon the conclusion of the contest (a
"Tax Advance") or pay such Tax Indemnitee the amount payable
by Old Dominion pursuant to paragraph (a) above with respect
to such Tax,
(v) Old Dominion agrees to pay (and pays on demand)
and without after-tax cost to such Tax Indemnitee or the Owner
Participant all reasonable costs and expenses incurred by the
Tax Indemnitee in connection with the contest of such claim
(including, without limitation, reasonable fees and
disbursements of counsel),
(vi) the Tax Indemnitee has been provided at Old
Dominion's sole expense with an opinion, reasonably acceptable
to such Tax Indemnitee, of independent tax counsel of
recognized standing selected by Old Dominion and reasonably
acceptable to the Tax Indemnitee to the effect that there is a
reasonable basis for contesting such Tax Claim, and
(vii) the amount of Taxes in controversy, taking into
account the amount of all similar and logically related Taxes
with respect to the transactions contemplated by Operative
Documents that could be raised in any other year (including
any future year) not barred by the statute of limitations,
exceeds $75,000.
(4) Waiver of Indemnification. Notwithstanding anything to the
contrary contained in this Section 8.2, the Tax Indemnitee at any time
may elect to decline to take any action or any further action with
respect to a Tax Claim and may in its sole discretion settle or
compromise any contest with respect to such Tax Claim without Old
Dominion's consent if the Tax Indemnitee:
37
(i) waives its right to any indemnity payment by
Old Dominion pursuant to this Section 8.2 in respect of such
Tax Claim, and
(ii) promptly repays to Old Dominion any Tax Advance
and any amount paid to such Tax Indemnitee under paragraph (a)
above in respect of such Taxes, plus interest on such Tax
Advance or other amounts at the IRS rate for refunds (or other
applicable state or local interest rate for refunds), payable
from the date of payment of such amounts by Old Dominion to
the Tax Indemnitee to (but excluding) the date of repayment of
such amounts by the Tax Indemnitee to Old Dominion.
If the Tax Indemnitee settles a Tax Claim in respect of which the
consent of Old Dominion to such settlement is required and has
reasonably been withheld and if Old Dominion is thereby precluded as a
matter of law from initiating or continuing a contest hereunder of any
Tax Claim for any other taxable period, the Tax Indemnitee shall be
deemed to have waived the payment by Old Dominion under this Section
8.2 of any indemnity amounts in respect of any such other Tax Claim.
(h) REPORTS.
(1) If any report, statement or return is required to be filed
by a Tax Indemnitee with respect to any Tax that is subject to
indemnification under this Section 8.2, Old Dominion will (1) notify
the Tax Indemnitee in writing of such requirement not later than 30
days prior to the date such report, statement or return is required to
be filed (determined without regard to extensions) and (2) either (x)
if permitted by applicable law, prepare such report, statement or
return for filing by Old Dominion in such manner as will show the
ownership of Clover Unit 1 by the Owner Trustee for United States
federal, state and local income tax purposes (if applicable), send a
copy of such report, statement or return to the Tax Indemnitee and
timely file such report, statement or return with the appropriate
taxing authority, or (y) if so directed by the Tax Indemnitee or in any
event if practicable and if the return to be filed reflects only
information in respect of the transactions contemplated by the
Operative Documents, prepare and furnish to such Tax Indemnitee not
later than 30 days prior to the date such report, statement or return
is required to be filed (determined without regard to extensions) a
proposed form of such report, statement or return for filing by the Tax
Indemnitee. If no report, statement or return is required to be filed
with respect to a Tax subject to indemnification under this Section
8.2, Old Dominion will notify the Tax Indemnitee of such Tax in writing
not later than 30 days prior to the due date for payment of such Tax.
(2) Subject to paragraph (c) above, not later than the date
which is five Business Days prior to the date any Tax described in the
preceding clause (1) is required to be paid by the Tax Indemnitee, Old
Dominion will either (y) if permitted by applicable law, pay such Tax
directly to the appropriate taxing authority or (z) pay the Tax
Indemnitee the amount of such Tax in immediately available funds.
38
(3) Each of the Tax Indemnitee or Old Dominion, as the case
may be, will timely provide the other, at Old Dominion's expense, with
all information in its possession that the other party may reasonably
require and request to satisfy its obligations under this paragraph
(h). Old Dominion shall hold each Tax Indemnitee harmless on an
After-Tax Basis from and against all liabilities arising out of any
insufficiency or inaccuracy of any report, statement or return if such
insufficiency or inaccuracy results from the insufficiency or
inaccuracy of any information required to be supplied by Old Dominion
pursuant to this paragraph (h) in preparing and filing such report,
statement or return.
(i) NON-PARTIES. If a Tax Indemnitee is not a party to this Agreement,
Old Dominion may require such Tax Indemnitee to agree in writing, in a form
reasonably acceptable to Old Dominion, to the terms of this Section 8 prior to
making any payment to such Tax Indemnitee under this Section.
SECTION 8.3. SURVIVAL. All the rights, privileges and obligations
arising from this Section 8 shall survive the termination of this Agreement.
SECTION 9. OLD DOMINION'S RIGHT OF QUIET ENJOYMENT
Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Equipment Operating Lease and the Foundation
Operating Lease, and expressly, severally and as to its own actions only, agrees
that, so long as no Event of Default under the Equipment Operating Lease or the
Foundation Operating Lease has occurred and is continuing, it shall not take or
cause to be taken any action contrary to Old Dominion's rights under the
Equipment Operating Lease and the Foundation Operating Lease, including, without
limitation, the right to possession, use and quiet enjoyment by Old Dominion.
SECTION 10. SUPPLEMENTAL FINANCING; LOAN PREPAYMENTS AND
REFINANCINGS.
SECTION 10.1. FINANCING NONSEVERABLE MODIFICATIONS. Upon the request of
Old Dominion delivered at least 90 days prior to financing the Lessor's
Percentage of the cost of any Nonseverable Modification, the Owner Trustee, the
Agent and the Lenders agree to cooperate with Old Dominion to (i) issue
Additional Loan Certificates under the Loan Agreement to finance such
Nonseverable Modifications which will rank PARI PASSU with the Loan Certificates
then outstanding as to the Collateral, other than the Deposit, the Deposit
Agreement (including the Certificate of Deposit) and the Deposit Pledge
Agreement (with respect to which such Additional Loan Certificates will be
subordinated) and which will not be secured by the Payment Undertaking
Agreement, the Payment Undertaking Pledge Agreement and the Payment Undertaking
Collateral; (ii) execute and deliver one or more supplements to the Loan
Agreement and, if applicable, the Leasehold Mortgage for purposes of subjecting
any such Nonseverable Modifications to the Liens thereof; and (iii) execute and
deliver an amendment to the Equipment
39
Operating Lease or the Foundation Operating Lease, as the case may be, to
reflect the adjustments required by clause (vi) below; PROVIDED, HOWEVER, that
(A) the Owner Participant shall have been given the opportunity to, but shall
have no obligation to, provide all or part of the funds required to finance any
such Nonseverable Modification by making an Additional Equity Investment in such
amount, if any, as it may determine in its sole and absolute discretion, but Old
Dominion shall have no obligation to accept such Additional Equity Investment;
and (B) the conditions set forth below and in Section 2.11 of the Loan Agreement
shall have been satisfied. The obligation to finance such Nonseverable
Modifications through the issuance of Additional Loan Certificates (which Old
Dominion may not purchase) under Section 2.11 of the Loan Agreement (any
financing of Nonseverable Modifications through the issuance of such Additional
Loan Certificates under the Loan Agreement being called a "Supplemental
Financing") is subject to the following additional conditions:
(i) no Payment Default, Credit Default or Event of Default under
the Equipment Operating Lease or the Foundation Operating
Lease shall have occurred and be continuing unless, in the
case of an Event of Default under the Equipment Operating
Lease or the Foundation Operating Lease, the installation or
construction of the Nonseverable Modification to be financed
in such Supplemental Financing shall effect the cure of such
Event of Default;
(ii) there shall be no more than one Supplemental Financing in any
calendar year, and no more than three (3) Supplemental
Financings during the Term of the Equipment Operating Lease
and the Foundation Operating Lease;
(iii) each Supplemental Financing shall be for an amount not less
than $20 million and the aggregate principal amount of the
Loan Certificates issued in connection with any Supplemental
Financing shall not be greater than 87% of the cost of such
Nonseverable Modifications;
(iv) the aggregate principal amount of the Loan Certificates at any
time outstanding (including the Additional Loan Certificates
issued in connection with such Supplemental Financing) shall
not exceed 90% of the Fair Market Sales Value of the Lessor's
Unit 1 Interest at any time during the Term of the Equipment
Operating Lease and the Foundation Operating Lease, taking
into account the proposed and all prior Nonseverable
Modifications to Clover Unit 1;
(v) each Additional Loan Certificate issued in connection with
such Supplemental Financing shall be prepayable without
premium or penalty of any kind and shall have a final maturity
date of no later than the Loan Maturity Date;
(vi) appropriate adjustments pursuant to Sections 3.4 of the
Equipment Operating Lease and/or the Foundation Operating
Lease, as the case may be, shall be made to Basic Rent or
Foundation Basic Rent, Walk Away Payment, Foundation Walk Away
Payment, the applicable Termination Values and the Purchase
Option Price or Foundation Purchase Option Price (determined
without regard to any tax
40
benefits associated with such Nonseverable Modifications) for
purposes of providing the Owner Trustee with sufficient funds
to pay the principal and interest on such Additional Loan
Certificate;
(vii) the Owner Participant shall have received a favorable tax
opinion of Xxxxxxxxxx & Xxxxx LLP, satisfactory to the Owner
Participant, to the effect that the Supplemental Financing
creates no material incremental tax risk to the Owner
Participant;
(viii) the Owner Participant (determined in its sole judgment acting
in good faith) shall suffer no adverse accounting effects from
such Supplemental Financing;
(ix) Old Dominion shall have made or delivered such
representations, warranties, covenants, opinions or
certificates as the Owner Trustee, the Owner Participant, the
Agent or any Lender may reasonably request; and
(x) Old Dominion shall (x) pay to the Owner Trustee a financing
fee of $25,000 for each Supplemental Financing and (y) pay to
the Trust Company a financing fee of $2,500 for each
Supplemental Financing.
SECTION 10.2. MANDATORY PREPAYMENT OF SERIES B LOAN CERTIFICATE;
ADDITIONAL LOAN CERTIFICATES TO REFINANCE MANDATORY PREPAYMENT OF SERIES B LOAN
CERTIFICATE.
(a) The Holder of the Series B Loan Certificate shall have the
right to cause the Series B Loan Certificate to be prepaid on any Mandatory
Prepayment Date occurring on or after the third anniversary of the Closing Date,
provided that the Agent, the Owner Trustee, the Owner Participant and Old
Dominion shall have received a written notice from all Holders of the Series B
Loan Certificate at least 365 days prior to the date of such prepayment
specifying the Mandatory Prepayment Date on which the Series B Loan Certificate
shall be prepaid.
(b) If the Holders of the Series B Loan Certificate elect to
have the Series B Loan Certificate prepaid pursuant to paragraph (a) of this
Section 10.2, the Owner Trustee agrees, subject to satisfaction of the terms and
conditions of this paragraph (b) of this Section 10.2, to issue Additional Loan
Certificates on or before the Mandatory Prepayment Date to refinance the Series
B Loan Certificate or any Loan Certificate previously issued pursuant to this
paragraph (b) of this Section 10.2. The obligations of the Owner Trustee to
issue such Additional Loan Certificates shall be subject, in addition to
satisfaction of all conditions of Section 2.11 of the Loan Agreement to the
issuance of Additional Loan Certificate, to the satisfaction of the following
conditions:
(i) no Payment Default or Event of Default under the Equipment
Operating Lease or the Foundation Operating Lease shall have occurred
and be continuing;
(ii) the principal amount of such Additional Loan Certificate
shall be equal to the outstanding principal amount of the Series B Loan
Certificate on the date such Loan
41
Certificates are refinanced (the "Loan Refinancing Date") (after taking
into account any amortization of principal, if any, occurring on such
Loan Refinancing Date);
(iii) each Additional Loan Certificate shall be prepayable
without premium or penalty of any kind and shall have a final maturity
date of no later than the Loan Maturity Date;
(iv) appropriate adjustments pursuant to Section 3.4 of the
Equipment Operating Lease and Section 3.4 of the Foundation Operating
Lease shall be made to Basic Rent and Foundation Basic Rent and the
applicable Termination Values in order to preserve the Owner
Participant's Net Economic Return and reflect the interest rate on the
Additional Loan Certificate and the revised interest rate on the Series
A Loan Certificate pursuant to Section 2.12 of the Loan Agreement;
(v) the Series A Loan Certificates are restructured pursuant
to Section 2.12 of the Loan Agreement and the Payment Undertaking
Agreement is appropriately adjusted pursuant to Section 3.3 thereof;
(vi) such refinancing shall not, in and of itself, result in a
violation of Applicable Law not attributable to a default in or a
breach of the obligations of any such Person hereunder or under the
other Operative Documents;
(vii) the representations and warranties of Old Dominion set
forth in clause (n) of Section 3.3 of this Agreement shall be true and
correct in all material respects on and as of the Loan Refinancing Date
with the same force and effect as though made on and as of such Loan
Refinancing Date and the Owner Participant, the Owner Trustee and the
Agent shall have received an Officer's Certificate from Old Dominion to
such effect;
(viii) any authorization or approval or other action by, or
notice to or filing with, any Governmental Entity required for such
issuance of Additional Loan Certificates has been duly obtained, taken
or given and the Owner Participant, the Owner Trustee and the Agent
shall have received one or more opinions of counsel for Old Dominion
(such opinions and such counsel to be reasonably acceptable to the
Owner Participant, the Owner Trustee and the Agent) to such effect;
(ix) such Additional Loan Certificates provide for the same
principal amortization, interest accrual periods and "interest roll-up"
provisions applicable to the Series B Loan Certificates; and
(x) the representations and warranties set forth in Section
3.4 of this Agreement shall be true and correct in all material
respects on and as of the Loan Refinancing Date with the same force and
effect with respect to the new Lenders as of such Loan Refinancing Date
and the Owner Participant, the Owner Trustee and the Agent shall have
received an Officer's Certificate from the new Lenders to such effect.
42
SECTION 10.3. OPTIONAL REFINANCING. (a) Unless a Payment Default,
Credit Default or an Event of Default shall have occurred and be continuing, at
the request of Old Dominion, the Owner Participant, the Owner Trustee and the
Agent agree to cooperate with Old Dominion to refinance the Loan Certificates in
whole but not in part, through the issuance of Additional Loan Certificates. The
obligation of the Owner Participant and the Owner Trustee to effect such a
refinancing shall be subject to the satisfaction of all conditions to the
issuance of Additional Loan Certificates under Section 10.2 (other than
paragraph (viii)) and Section 2.11 of the Loan Agreement and, in addition, to
the satisfaction of the following conditions:
(i) all documentation in connection with such refinancing
shall be satisfactory to the Owner Trustee and the Owner Participant;
(ii) the Owner Participant shall at the expense of Old
Dominion have obtained a favorable tax opinion from the Owner
Participant's Tax Counsel to the effect that the exercise of such
refinancing right (as opposed to the existence of such right) will not
result in a material incremental risk of any unindemnified adverse tax
consequence to Owner Participant or the Owner Trustee, or, if such
opinion cannot be obtained from such counsel, the Owner Participant
shall be indemnified by Old Dominion to the reasonable satisfaction of
Owner Participant;
(iii) the Owner Participant shall not suffer any adverse
accounting effects as a result of such refinancing, including but not
limited to, the loss of leveraged lease accounting; and
(iv) such additional representations, warranties, indemnities
and opinions of counsel as the Owner Participant or the Owner Trustee
shall reasonably request.
SECTION 10.4. REFINANCING COSTS. Old Dominion hereby agrees to pay all
reasonable costs and expenses of the Transaction Parties, including the
reasonable fees and expenses of counsel to the Owner Participant, the Owner
Trustee, the Lenders and the Agent, in each case to the extent incurred in
connection with any refinancing pursuant to this Section 10 whether or not the
refinancing is consummated.
SECTION 11. CONVEYANCE OF TITLE TO RETAINED ASSETS
Notwithstanding the provisions of any Operative Document, including,
but not limited to Section 6 of the Equipment Operating Lease and Section 6 of
the Foundation Operating Lease, Old Dominion shall have the right to convey
legal title to any or all Retained Assets to a Person in a transaction
characterized as a sale and leaseback for United States commercial law purposes,
but in which ownership is conveyed for tax purposes of the domicile of such
Person, but only for purposes of the domicile of such Person, PROVIDED THAT such
transaction satisfies the following conditions:
43
(a) such conveyance and related leaseback does not affect the
status of the Equipment Head Lease and the Foundation Head
Lease as conveying ownership for United States income tax
purposes to the Owner Participant;
(b) the interest of any purchaser of legal title to Retained
Assets or any portion thereof is subject and subordinate to
the interest of the Owner Trustee under the Equipment Head
Lease and the Foundation Head Lease; and
(c) such conveyance and leaseback does not otherwise adversely
affect any right or interest of the Owner Trustee under the
Equipment Operating Lease, the Foundation Operating Lease, the
Equipment Head Lease, the Foundation Head Lease or any other
Operative Document, the Owner Participant under any Operative
Document or of the Lenders or the Agent under the Loan
Agreement, the Leasehold Mortgage, the Payment Undertaking
Agreement or the Deposit Pledge Agreement or the existence of
the Deposit and the Owner Trustee, the Owner Participant, the
Lenders and the Agent shall have received an opinion of
counsel, in form and substance reasonably satisfactory to each
such party, to such effect.
Not later than 30 days prior to the date of consummation of a
transaction contemplated by this Section 11, Old Dominion will give the Owner
Trustee, the Owner Participant and the Agent written notice of its intention to
consummate such a transaction along with a written description of the
transaction contemplated. In connection with the negotiation of such proposed
transaction Old Dominion will make available to the Owner Participant, the Agent
and their counsel drafts of transaction documents in connection with such
proposed transaction at such times as to permit sufficient review to determine
compliance with this Section 11 and to determine whether the opinion of counsel
contemplated by the succeeding sentence can be delivered. Old Dominion's right
to consummate such transaction shall be subject to receipt by the Owner
Participant of either (i) a tax opinion of Xxxxxxxxxx & Xxxxx LLP or other tax
counsel to the Owner Participant reasonably satisfactory to the Owner
Participant to the effect that the proposed transaction creates no material
incremental tax risk to the Owner Participant, the Owner Trustee or any
Affiliate, or (ii) if Old Dominion's Bonds are rated at least the Minimum Credit
Ratings, (A) a tax opinion of counsel to Old Dominion, such counsel and such
opinion to be reasonably satisfactory to the Owner Participant, to the effect
that it is more likely than not that the proposed transaction will not adversely
affect the U.S. federal income tax consequences of the transactions contemplated
by the Operative Documents to the Owner Participant, the Owner Trustee, or any
Affiliate, and (B) an indemnity in form and substance satisfactory to the Owner
Participant against any adverse tax consequences resulting in whole or in part
from the proposed transaction. Old Dominion will reimburse the Owner Trustee,
the Owner Participant, the Agent and the Lender for all their costs and expenses
in connection with their review of the proposed transaction. In addition, if the
transaction contemplated by this Section 11 shall be closed, Old Dominion shall
pay the Owner Participant a $25,000 fee.
44
SECTION 11A. SUBSTITUTE SECURITY FOR PAYMENT UNDERTAKING AGREEMENT
Old Dominion may at any time and for any reason (x) replace the obligor
under the Payment Undertaking Agreement with a substitute Bank selected by Old
Dominion in its sole discretion and in such event Old Dominion shall make any
additional payment to such new Bank so that such Bank will agree in a successor
Payment Undertaking Agreement to make payment at the same time and in the same
amounts as provided in the initial Payment Undertaking Agreement and Old
Dominion may retain any funds which such new Bank does not need so to agree, or
(y) replace the Payment Undertaking Agreement with Acceptable Substitute
Security (as hereinafter defined). Any successor Payment Undertaking Agreement,
new Bank and Acceptable Substitute Security must be acceptable to the Owner
Trustee and the Holder of any Series A Loan Certificate. It shall be a condition
to the ability of Old Dominion to replace the Payment Undertaking Agreement with
Acceptable Substitute Security that the Owner Trustee and the Lessee shall agree
to the adjustment of the interest rate on the Series A Loan Certificate required
by the Holder of any Series A Loan Certificate pursuant to paragraph (c) of
Section 2.1 of the Loan Agreement. In connection with any replacement of the
Payment Undertaking Agreement with a successor Payment Undertaking Agreement (i)
the Transaction Parties agree to execute such documents as are necessary to
effect the pledge and repledge of such successor Payment Undertaking Agreement
on terms identical to those of the Payment Undertaking Pledge Agreement and the
Loan Agreement and (ii) the Owner Trustee, the Owner Participant, the Lender and
the Agent shall be provided with such certificates and opinions of counsel as
were provided to the Bank on the Closing Date and opinions of counsel concerning
the pledge and repledge of the successor Payment Undertaking Agreement to the
same effect as those rendered on the Closing Date in respect of the original
Payment Undertaking Agreement, the Payment Undertaking Pledge Agreement and the
Loan Agreement. In the event that Old Dominion has replaced the Payment
Undertaking Agreement with Acceptable Substitute Security, the parties hereto
agree to execute such documents as are necessary to (x) reflect the release of
the Payment Undertaking Agreement from the Liens of the Payment Undertaking
Pledge Agreement and (y) create a first priority perfected security interest in
such Acceptable Substitute Security in favor of the Holder of any Series A Loan
Certificate. As used in this Section 11A, the term "successor Payment
Undertaking Agreement" shall mean the Payment Undertaking Agreement as in effect
after the replacement of the Bank pursuant hereto. For purposes of this Section
11A, the phrase "Acceptable Substitute Security" shall mean one or more letters
of credit, guarantees, collateral deposits or other equivalent undertaking in
favor of the Owner Trustee and the Holder of any Series A Loan Certificate from
an Acceptable Credit Bank (or in the case of collateral, deposits issued or
guaranteed by an Acceptable Credit Bank or other issuer with an equivalent
credit rating) in form and substance reasonably acceptable to Old Dominion, the
Owner Participant and the Owner Trustee and the Holder of any Series A Loan
Certificate which shall remain in full force and effect at all times until the
Expiration Date (provided that a letter of credit may have an earlier expiry
date so long as suitable arrangements are agreed to among Old Dominion, the
Owner Participant and the Holder of any Series A Loan Certificate respecting
substitution of new letters of credit or cash therefor during such period) and
shall be payable in at least the same amounts and on the same dates as payments
are required under the Payment Undertaking Agreement, together with such
certificates, opinions and other documents as Old
45
Dominion, the Owner Participant or the Holder of any Series A Loan Certificate
may reasonably request to evidence the enforceability of such undertaking. For
purposes of this Section 11A, an "Acceptable Credit Bank" shall mean a bank or
other financial institution the long-term, senior, unsecured obligations of
which are rated AA or better by S&P or Aa2 or better by Xxxxx'x, or are
guaranteed by a bank or other financial institution the long-term, senior,
unsecured obligations of which are so rated.
SECTION 12. MISCELLANEOUS
SECTION 12.1. CONSENTS. The Owner Participant covenants and agrees that
it shall not unreasonably withhold its consent to any consent requested of the
Owner Trustee under the terms of the Operative Documents that by its terms is
not to be unreasonably withheld by the Owner Trustee.
SECTION 12.2. BANKRUPTCY OF TRUST ESTATE. If (i) all or any part of the
Trust Estate becomes the property of a debtor subject to the reorganization
provisions of Title 11 of the United States Code, as amended from time to time,
(ii) pursuant to such reorganization provisions the Owner Participant is
required, by reason of the Owner Participant being held to have recourse
liability to the debtor or the trustee of the debtor directly or indirectly, to
make payment on account of any amount payable as principal or interest on the
Loan Certificates, and (iii) the Lender actually receives any Excess Amount, as
defined below, which reflects any payment by the Owner Participant on account of
clause (ii) above, the Lender shall promptly refund to the Owner Participant
such Excess Amount. For purposes of this Section 12.2, "Excess Amount" means the
amount by which such payment exceeds the amount which would have been received
by the Lender if the Owner Participant had not become subject to the recourse
liability referred to in clause (ii) above. Nothing contained in this Section
12.2 shall prevent the Lender from enforcing any personal recourse obligations
(and retaining the proceeds thereof) of the Owner Participant as contemplated by
this Participation Agreement (other than referred to in clause (ii)).
SECTION 12.3. AMENDMENTS AND WAIVERS. No term, covenant, agreement or
condition of this Agreement may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto.
SECTION 12.4. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all communications and notices provided for
herein shall be in writing or by a telecommunications device capable of creating
a written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, without limitation, by overnight mail or courier
service, (b) in the case of notice by United States mail, certified or
registered, postage prepaid, return receipt requested, upon receipt thereof, or
(c) in the case of notice by such a telecommunications device, upon transmission
thereof, provided such transmission is promptly confirmed by either of the
methods set forth in clauses (a) or (b) above, in each case addressed to each
party hereto at its address set forth below or, in the case of any such party
46
hereto, at such other address as such party may from time to time designate by
written notice to the other parties hereto:
If to Old Dominion:
Old Dominion Electric Cooperative
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Vice President of Accounting and Finance
If to the Owner Trustee:
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Manager - Corporate Trust
with a copy to:
the Owner Participant at the address set forth below.
If to the Owner Participant:
First Union National Bank of Florida
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Vice-President
47
If to the Agent:
Utrecht-America Finance Co.,
c/o Rabobank Nederland, New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel's Office
A copy of all communications and notices provided for herein shall be sent by
the party giving such communication or notice to Virginia Power at:
Virginia Electric and Power Company
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
SECTION 12.5. SURVIVAL. All warranties, representations, indemnities
and covenants made by any party hereto, herein or in any certificate or other
instrument delivered by any such party or on the behalf of any such party under
this Agreement shall be considered to have been relied upon by each other party
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by any such
party or on behalf of any such party.
SECTION 12.6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof, including each successive holder of the
Beneficial Interest permitted under Section 5.1. Except as expressly provided
herein or in the other Operative Documents, no party hereto may assign its
interests herein without the consent of the other parties hereto.
SECTION 12.7. BUSINESS DAY. Notwithstanding anything herein or in any
other Operative Document to the contrary, if the date on which any payment is to
be made pursuant to this Agreement or any other Operative Document is not a
Business Day, the payment otherwise payable on such date shall be payable on the
next succeeding Business Day with the same force and effect as if made on such
scheduled date and (PROVIDED such payment is made on such succeeding Business
Day) no interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business Day.
SECTION 12.8. GOVERNING LAW. THIS AGREEMENT SHALL BE IN ALL
RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
48
SECTION 12.9. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 12.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one Agreement.
SECTION 12.11. HEADINGS AND TABLE OF CONTENTS. The headings of the
sections of this Agreement and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
SECTION 12.12. LIMITATIONS OF LIABILITY.
(a) LIABILITIES OF THE PARTICIPANTS. Neither the Owner Trustee, the
Trust Company nor the Owner Participant shall have any obligation or duty to Old
Dominion or to others with respect to the transactions contemplated hereby,
except those obligations or duties expressly set forth in this Agreement and the
other Operative Documents, and neither the Owner Trustee, the Trust Company nor
the Owner Participant shall be liable for performance by any other party hereto
of such other party's obligations or duties hereunder. Without limitation of the
generality of the foregoing, under no circumstances whatsoever shall the Owner
Participant be liable to Old Dominion for any action or inaction on the part of
the Owner Trustee in connection with the transactions contemplated herein,
whether or not such action or inaction is caused by willful misconduct or gross
negligence of the Owner Trustee, unless such action or inaction is at the
direction of the Owner Participant, and such direction is expressly permitted
hereby.
(b) NO RECOURSE TO THE OWNER TRUSTEE. Anything in this Participation
Agreement or the Loan Certificates to the contrary notwithstanding, except as
otherwise provided in Sections 3.1, 6.1, 6.2 and 6.7 and except with respect to
Lessor's Liens, it is understood and agreed that (irrespective of any breach of
any representation, covenant, agreement or undertaking of any nature whatsoever
made in this Participation Agreement or the Loan Certificates by the Owner
Trustee), no recourse shall be had under any rule of law, statute or
constitution or by the enforcement of any assessments or penalties or otherwise
for the payment of any amounts due on the Loan Certificates or due under the
Operative Documents or for any claim based thereon or otherwise in respect
thereof against (i) except as a result of its gross negligence, fraud or willful
misconduct, the Owner Trustee or any past, present or future Affiliate, partner,
officer, director, any owner, shareholder, agent or employee of or in any
thereof or director or shareholder of any partner thereof or their legal
representatives, successors or assigns, (ii) except as a result of its gross
negligence, fraud or willful misconduct, any successor Owner Trustee or (iii)
any Person for whom the Owner Trustee was acting as an agent for the account and
benefit of such Person in entering into the transactions evidenced by this
Participation Agreement and the Loan Certificates, and that such Person was or
was alleged to be the principal of the Owner Trustee. Furthermore, it is
expressly understood that, except as expressly set forth in this
49
Section 12.12(b), all such liability (a) of the Owner Trustee or any past,
present or future Affiliate, partner, officer, director, any owner, shareholder,
agent or employee of or in any thereof or director or shareholder of any partner
thereof or any of their respective legal representatives, successors or assigns,
(b) any successor Owner Trustee or (c) such other Person, is and is being
expressly waived and released as consideration for the execution of this
Participation Agreement by Owner Trustee and all Persons having any claim
against the Owner Trustee by reason of the transactions contemplated by this
Participation Agreement and the other Operative Documents agree to look solely
to the Trust Estate and to the sums due or to become due under the Trust Estate
(other than Excluded Payments) for the payment of any such sums.
(c) In addition to and not in limitation of the foregoing, it is
understood and agreed that (i) this Participation Agreement is executed and
delivered by the Trust Company, not in its individual capacity but solely as
trustee under the Participation Agreement in the exercise of the power and
authority conferred and vested in it as such trustee, (ii) except as to Lessor's
Liens applicable to the Trust Company and Sections 3.1, 6.1, 6.2 and 6.7 each of
the representations, undertakings and agreements made herein by the Owner
Trustee are not personal representations, undertakings and agreements of the
Trust Company, but are binding only on the Owner Trustee, as trustee, and (iii)
actions to be taken by the Owner Trustee pursuant to its obligations hereunder
and under the Loan Certificates may be taken by the Owner Trustee only upon
specific authority of the Owner Participant as provided in the Trust Agreement.
SECTION 12.13. CONSENT TO JURISDICTION. To the extent permitted by
applicable law, each of the parties hereto (i) hereby irrevocably submits to the
nonexclusive jurisdiction of the Supreme Court of the State of New York, New
York County (without prejudice to the right of any party to remove to the United
States District Court for the Southern District of New York) and to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York for the purposes of any suit, action or other proceeding
arising out of this Agreement, the other Operative Documents, or the subject
matter hereof or thereof or any of the transactions contemplated hereby or
thereby brought by any of the parties hereto or their successors or assigns,
(ii) hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court, or in such
federal court, and (iii) to the extent permitted by Applicable Law, hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding any claim that it is not
personally subject to the jurisdiction of the above-named courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement, the other
Operative Documents, or the subject matter hereof or thereof may not be enforced
in or by such court.
SECTION 12.14. FURTHER ASSURANCES. Each party hereto will promptly and
duly execute and deliver such further documents to make such further assurances
for and take such further action reasonably requested by any party to whom such
first party is obligated, all as may be reasonably necessary to carry out more
effectively the intent and purpose of this Participation Agreement and the other
Operative Documents.
50
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered by their respective officers thereunto
duly authorized as of the day and year first above written.
OLD DOMINION ELECTRIC COOPERATIVE
By:/s/ XXXXXX X. XXXXXX
---------------------------------------
Xxxxxx X. Xxxxxx
Vice President
Date: March 1, 0000
XXXXX XXXXXX BANK AND
TRUST COMPANY, not in its
individual capacity except
as expressly provided
herein, but solely as
Owner Trustee under the
Trust Agreement
By:/s/ X. XXXXXX XXXXX
---------------------------------------
X. Xxxxxx Xxxxx
Vice President of Accounting
and Finance
Date: March 1, 0000
XXXXX XXXXX XXXXXXXX XXXX XX XXXXXXX
By:/s/ XXXXX X. XXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Date: Xxxxx 0, 0000
XXXXXXX-XXXXXXX FINANCE CO.
By:/s/ XXXXXX XX XXXXXXX THEGE
--------------------------------------
Name: Xxxxxx Xx Xxxxxxx Xxxxx
Title: Vice President
Date: March 1, 1996
APPENDIX A
TO
PARTICIPATION
AGREEMENT
DEFINITIONS
A-1
SCHEDULE 1
TO
PARTICIPATION
AGREEMENT
TRANSACTION COSTS
Funded Funded
Invoice Prior at
Received to Closing Closing
-------- ---------- -------
x/ Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, special $700,000 $700,000
counsel for ODEC
x/ XxXxxxx Xxxx, general Virginia counsel for 0 238,065
ODEC
x/ Virginia Recording Costs (Reimburse 0 87,000
XxXxxxx, Xxxx)
x/ Xxxxxxxxxx & Xxxxx LLP, special counsel 200,000 750,000
for First Union
x/ Xxxx & Vallentine, special Virginia 50,000 99,000
counsel for First Union and Rabobank
x/ Xxxxx, Xxxx & Xxxxxxxx and DeBrauw, 0 150,187
Blackstone & Westbroek, U.S. and Dutch
counsel for Rabobank Nederland and
Utrecht America
x/ Rabobank Up Front Fee 0 600,000
x/ Day, Xxxxx & Xxxxxx, special counsel to 0 30,600
Owner Trustee
x/ State Street Bank & Trust Company as 0 40,500
Owner Trustees (Lump payment for 23
years)
x/ Deloitte & Touche Valuation Group 0 103,095
x/ Xxxxxxx & Xxxxxxx 0 5,000
x/ Xxxxx & XxXxxxxx 0 37,279
x/ Bond Insurance for Equity Deposit 0 518,619
AMBAC Indemnity Corporation
(47.5 Basis Points on Gross Debt
Service = ($109,182,937)
x/ Coopers & Xxxxxxx 0 22,796
x/ First Union Leasing Corporation (Facility 0 250,000
Fee)
x/ Crestar Bank as Indenture Trustee counsel, 0 11,359
Williams, Mullen, Christian & Xxxxxxx
SUBTOTAL $950,000 $3,243,500
S1-1
Funded
Invoice Prior Funded
Received to Closing At Closing
-------- ---------- ----------
(%) 1.03%
BOT Financial Services, Inc., as Advisor 0 2,075,000
to ODEC -------- ---------
TOTAL TRANSACTION EXPENSES $950,000 $5,318,500
(%) 0.30% 1.69%
S1-2
SCHEDULE 2
OF
PARTICIPATION
AGREEMENT
RECORDATION AND UCC FILINGS
I. RECORDATION:
1) Personal Property Agreement, Leasehold Mortgage, Foundation
Head Lease, Foundation Operating Lease, and Option Agreement
to Lease to be filed in the land records office in:
Halifax County, Virginia
2) Fifth Supplemental Indenture to be filed in the land records
offices in:
Henrico County, Virginia (U.C.C. records)
Louisa County, Virginia (Land and U.C.C. records)
Orange County, Virginia (Land and U.C.C. records)
Spottsylvania County, Virginia (Land and U.C.C. records)
Virginia State Corporation Commission
II. UCC FINANCING STATEMENTS:
1) Precautionary - Non-fixture.
Debtor: State Street Bank and Trust Company
Creditor: Utrecht-America Finance Co.
Places Filed: Clerk of Circuit Court, Halifax County,
Commonwealth of Virginia
Boston City Clerk, Massachusetts
Secretary of State, Massachusetts
Virginia State Corporation Commission
2) Precautionary - Non-fixture.
Debtor: Old Dominion Electric Cooperative
Creditor: State Street Bank and Trust Company
Places Filed: Virginia State Corporation Commission
Clerk of Circuit Court, Henrico County,
Commonwealth of Virginia
Clerk of Circuit Court, Halifax County,
Commonwealth of Virginia
S2-1
3) Precautionary - Fixture Filing.
Debtor: Old Dominion Electric Cooperative
Creditor: State Street Bank and Trust Company
Places Filed: Clerk of Circuit Court, Halifax County,
Commonwealth of Virginia
4) Precautionary - Fixture Filing.
Debtor: State Street Bank and Trust Company
Creditor: Old Dominion Electric Cooperative
Places Filed: Clerk of Circuit Court,
Halifax County,
Commonwealth of Virginia
5) Precautionary - Fixture Filing.
Debtor: State Street Bank and Trust Company
Creditor: Utrecht-America Finance Co.
Places Filed: Clerk of Circuit Court,
Halifax County,
Commonwealth of Virginia
6) Rental Obligation Security for Equipment and Foundation
Operating Leases.
Debtor: Old Dominion Electric Cooperative
Creditor: State Street Bank and Trust Company
Assignee: Utrecht-America Finance Co.
Places Filed: Virginia State Corporation Commission
Clerk of Circuit Court, Henrico County,
Commonwealth of Virginia
S2-2
EXHIBIT A
TO
PARTICIPATION
AGREEMENT
FORM OF TRUST AGREEMENT
EXHIBIT B
TO
PARTICIPATION
AGREEMENT
FORM OF EQUIPMENT HEAD LEASE
EXHIBIT C
TO
PARTICIPATION
AGREEMENT
FORM OF FOUNDATION HEAD LEASE
EXHIBIT D
TO
PARTICIPATION
AGREEMENT
FORM OF OPTION AGREEMENT
EXHIBIT E
TO
PARTICIPATION
AGREEMENT
FORM OF CLOVER AGREEMENTS ASSIGNMENT
EXHIBIT F
TO
PARTICIPATION
AGREEMENT
FORM OF EQUIPMENT OPERATING LEASE
EXHIBIT G
TO
PARTICIPATION
AGREEMENT
FORM OF FOUNDATION OPERATING LEASE
EXHIBIT H
TO
PARTICIPATION
AGREEMENT
FORM OF LOAN AGREEMENT
EXHIBIT I
TO
PARTICIPATION
AGREEMENT
FORM OF LEASEHOLD MORTGAGE
EXHIBIT J
TO
PARTICIPATION
AGREEMENT
FORM OF PLEDGE AGREEMENT
EXHIBIT K
TO
PARTICIPATION
AGREEMENT
FORM OF DEPOSIT AGREEMENT
EXHIBIT L
TO
PARTICIPATION
AGREEMENT
FORM OF DEPOSIT PLEDGE AGREEMENT
EXHIBIT M
TO
PARTICIPATION
AGREEMENT
FORM OF TAX INDEMNITY AGREEMENT
EXHIBIT N
TO
PARTICIPATION
AGREEMENT
FORM OF SECOND SEVERANCE AGREEMENT
EXHIBIT O
TO
PARTICIPATION
AGREEMENT
FORM OF ASSUMPTION AGREEMENT
EXHIBIT P
TO
PARTICIPATION
AGREEMENT
FORM OF GUARANTY
EXHIBIT Q
TO
PARTICIPATION
AGREEMENT
FORM OF PAYMENT UNDERTAKING AGREEMENT
EXHIBIT R
TO
PARTICIPATION
AGREEMENT
FORM OF PAYMENT UNDERTAKING PLEDGE AGREEMENT
APPENDIX A - DEFINITIONS
GENERAL PROVISIONS
The following terms shall have the following meanings for all purposes
of the Operative Documents referred to below, unless otherwise defined in an
Operative Document or the context thereof shall otherwise require, and such
meanings shall be equally applicable to both the singular and the plural forms
of the terms herein defined. In the case of any conflict between the provisions
of this Appendix A and the provisions of the main body of any Operative
Document, the provisions of the main body of such Operative Document shall
control the construction of such Operative Document.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as the same may be amended,
supplemented and otherwise modified from time to time, and (ii) references to
parties to agreements shall be deemed to include the permitted successors and
assigns of such parties.
DEFINED TERMS
"ACCEPTABLE POWER PURCHASER" shall mean a Person that meets the following
criteria as of the Expiration Date based upon its most recent audited financial
statements:
(i) such Person has a net worth of at least $500 million;
(ii) the unsecured senior debt obligations of such Person have a
credit rating of not less than A3 by Xxxxx'x and A- by S&P,
unless such Person has provided credit enhancement
(including the possible provision of collateral supporting
its obligations under any Power Sales Agreement) in an
amount and manner and on conditions satisfactory in all
respects to the Owner Participant;
(iii) such Person will not violate the Owner Participant's credit
restrictions or guidelines applicable from time to time for
the extension of credit in general; and
(iv) such Person is not Old Dominion, any cooperative member of
Old Dominion, Virginia Power or an Affiliate of the
foregoing.
"ACCEPTABLE SUBSTITUTE SECURITY" shall have the meaning specified in Section 11A
of the Participation Agreement.
"ACKNOWLEDGMENT" shall mean the Acknowledgment executed by the Bank in
connection with the Payment Instruction.
"ACTUAL KNOWLEDGE" shall mean, with respect to any Transaction Party, actual
knowledge of, or receipt of written notice by, an officer of such a Transaction
Party having responsibility for the administration of the Overall Transaction.
"ADDITIONAL EQUITY INVESTMENT" shall mean the amount, if any, the Owner
Participant shall provide (in its sole and absolute discretion) to finance all
or a portion of Lessor's Percentage of the cost of any Nonseverable Modification
financed pursuant to Section 10.1 of the Participation Agreement.
"ADDITIONAL LOAN CERTIFICATES" shall mean any Loan Certificates issued pursuant
to Section 2.11 of the Loan Agreement.
"ADR CLASS LIFE" shall mean the class life of an asset determined pursuant to
the class life asset depreciation system under Section 167 of the Code.
"ADVISOR TO THE LESSEE" shall mean BOT.
"AFFILIATE" of a particular Person shall mean any Person (i) directly or
indirectly controlling, controlled by or under common control with the
particular Person, (ii) that beneficially owns or holds (directly or through a
subsidiary) more than 50% of the voting power of any class of voting securities
of the particular Person or (iii) more than 50% of the voting securities (or in
the case of a Person which is not a corporation, more than 50% of the equity
interest) of which is beneficially owned or held by the particular Person or a
subsidiary thereof. For purposes of this definition, "control" when used with
respect to any particular Person shall mean the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AFTER-TAX BASIS", in the context of determining the amount of a payment to be
made on such basis, shall mean the payment of an amount which, after reduction
by the net increase in income tax liability of the recipient of such payment and
its Affiliates (or any consolidated or combined group of which it is a member)
which net increase shall be calculated by taking into account any reduction in
such taxes resulting from any tax benefits realized or (except in the case of
the Agent or any Lender) reasonably expected to be realized by the recipient and
its Affiliates (or any consolidated or combined group of which it is a member)
as a result of such payment, shall be equal to the amount required to be paid.
In calculating the amount payable by reason of this provision, all income taxes
payable and tax benefits realized or to be realized shall be determined on the
assumptions that (i) the recipient shall be (x) subject to the applicable income
taxes at the highest marginal tax rates then applicable to corporate taxpayers
taxed on the same basis as the recipient that are in effect in the applicable
jurisdictions at the time such amount is received or properly accrued and (y)
that all tax benefits are utilized at the highest marginal rates then applicable
to corporate taxpayers taxed on the same basis as the recipient that are then in
2
effect in the applicable jurisdictions, and (ii) tax benefits to be realized in
any taxable year other than the year of payment are determined on a present
value basis using a discount rate equal to the rate of interest on underpayments
of federal income tax in effect at the time of the determination.
"AGENT" shall mean Utrecht-America, as agent for the Lenders under the Loan
Agreement, together with its successors and permitted assigns.
"AGENT'S ACCOUNT" shall mean the account (No. 13679) maintained by the Agent
with Rabobank Nederland, New York Branch or such other account of the Agent in
New York, New York, as the Agent may from time to time specify in a notice to
the other parties to the Participation Agreement.
"AMBAC" AND "AMBAC INDEMNITY" shall mean AMBAC Indemnity Corporation, a
Wisconsin-domiciled stock insurance corporation regulated by the Office of the
Commissioner of Insurance of the State of Wisconsin.
"AMORTIZATION DEDUCTIONS" shall have the meaning specified in Section 2(f) of
the Tax Indemnity Agreement.
"APPLICABLE LAW" shall mean, without limitation, all applicable laws and
treaties, judgments, decrees, injunctions, writs and orders of any court,
arbitration board or Governmental Entity and rules, regulations, orders,
licenses and permits of any Governmental Entity.
"APPLICABLE RATE" shall mean, the Debt Rate, in the case of the Lenders, and
6.75% per annum in the case of the Owner Participant.
"APPRAISAL" shall mean the appraisal prepared by the Appraiser with respect to
the Lessor's Unit 1 Interest referred to in Section 4.16 of the Participation
Agreement.
"APPRAISER" shall mean Deloitte & Touche LLP Valuation Group.
"ASSIGNED CLOVER INTERESTS" shall mean all of Old Dominion's rights, obligations
and liabilities under the Clover Agreements attributable to (a) the Xxxx 0 Site,
the Xxxx 0 Xxxxxxxxxx xxx xxx Xxxx 0 Xxxxxxxxx, (x) the Common Facilities Site,
the Common Facilities Foundation and the Common Facilities Equipment, and (c)
the Unit 2 Site as defined in the Ground Lease and Sublease, and which are
necessary for the use and operation of the Unit 1 Site, the Unit 1 Foundation
and the Unit 1 Equipment.
"ASSIGNEE" shall mean the Owner Trustee, as assignee under the Clover Agreements
Assignment, together with its successors and permitted assigns.
"ASSIGNOR" shall mean Old Dominion, as assignor under the Clover Agreements
Assignment, together with its successors and permitted assigns.
3
"AVAILABLE CAPACITY" shall have the meaning specified in Section 1.04 of the
Clover Operating Agreement.
"BANK" shall mean Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch and its successors and permitted assigns.
"BANKRUPTCY CODE" shall mean the United States Bankruptcy Reform Act of 1978, as
amended from time to time, 11 U.S.C. ss.101 ET SEQ.
"BASIC GROUND LEASE TERM" shall have the meaning specified in Section 2.2 of the
Ground Lease.
"BASIC RENT" shall mean all rent payable by the Lessee to the Lessor pursuant to
Section 3.2 of the Equipment Operating Lease, as the same may be adjusted from
time to time pursuant to Section 3.4 of the Equipment Operating Lease.
"BASIC TERM" shall mean the period commencing on the Basic Term Commencement
Date and ending at 11:59 P.M. (New York City time) on the Expiration Date.
"BASIC TERM COMMENCEMENT DATE" shall mean February 28, 1997.
"BENEFICIAL INTEREST" shall mean the interest of the Owner Participant under the
Trust Agreement.
"BOND INSURANCE POLICY" shall mean the bond insurance policy (No. FG0207BE)
issued by AMBAC relating to the 1996 Series A Bonds and the 1996 Series B Bonds.
"BOT" shall mean BOT Financial Services, Inc.
"BREAK COSTS" shall mean the actual amount reasonably determined by the Bank in
good faith to be the amount (if any) (x) required fully to compensate the Bank
for any costs, expenses, liabilities or losses suffered or incurred (including,
without limitation, any legal fees, out-of-pocket expenses and administration
costs) or (y) which represents a gain to the Bank, in each case, as a
consequence of breaking or unwinding or funding from other sources any
arrangements it may have made for investing the proceeds of the Specified Sum or
for hedging or funding its obligations under the Payment Undertaking Agreement,
in each case, as a result of the Bank being required to make a payment of Early
Termination Amount under the Payment Undertaking Agreement pursuant to clause
(ix) of paragraph (a) of Section 3.2 thereof.
"BURDENSOME TAX LAW CHANGE" shall mean a Proposed Tax Law Change that shall have
occurred on within two Business Day prior to the Closing Date and Old Dominion
shall have received notice of such Proposed Tax Law Change from the Owner
Participant within four Business Days after the Closing Date.
4
"BURDENSOME TAX LAW CHANGE VALUE" shall mean an amount equal to the sum of (a)
the outstanding principal balance of the Loan Certificates as of the date of
termination of the Equipment Operating Lease and the Foundation Operating Lease
pursuant to Section 13 of each in consequence of a Burdensome Tax Law Change
plus any and all interest accrued and unpaid thereon as of such date; (b) the
amount of the Equity Investment, and (c) interest on the amount specified in
clause (b) hereof, calculated at the rate of 6.75% per annum on the basis of a
year of 360 days and the number of days actually elapsed from the Closing Date
to such date of payment.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or other day on
which commercial banking institutions are authorized or required by law,
regulation or executive order to be closed in (i) Glen Allen, Virginia, (ii) the
city and state in which the principal corporate trust office of the Owner
Trustee is located, (iii) the city and state in which the principal office of
the Agent is located or (iv) Amsterdam, The Netherlands.
"CERTIFICATE OF DEPOSIT" shall mean the "Certificate of Deposit" as in the form
attached as Exhibit C to the Deposit Agreement.
"CFC" shall mean National Rural Utilities Cooperative Finance Corporation, a
District of Columbia cooperative association, or any successor thereto.
"CLAIM" shall mean any liability (including, without limitation, in respect of
negligence (whether passive or active or other torts), strict or absolute
liability in tort or otherwise, warranty, latent or other defects, statutory
liability, bodily injury or death), obligation, loss, settlement, damage,
penalty, claim, action, suit, proceeding (whether civil or criminal), judgment,
penalty, fine and other legal or administrative sanction, judicial or
administrative proceeding, cost, expense or disbursement, including reasonable
legal fees, expenses and reasonable related charges, of whatsoever kind and
nature.
"CLOSING" shall have the meaning specified in Section 2.2(a) of the
Participation Agreement.
"CLOSING DATE" shall mean the Scheduled Closing Date or such later date on which
the Closing of the transactions contemplated by the Participation Agreement
shall occur.
"CLOVER AGREEMENTS" shall mean the Clover Ownership Agreement and the Clover
Operating Agreement as amended from time to time.
"CLOVER AGREEMENTS ASSIGNMENT" shall mean the Clover Agreements Assignment and
Assumption Agreement, dated as of February 29, 1996, in substantially the form
of Exhibit E to the Participation Agreement, between the Assignee and the
Assignor.
"CLOVER FACILITY ASSETS" shall have the meaning specified in the first Recital
in the Second Severance Agreement.
5
"CLOVER OPERATING AGREEMENT" shall mean that certain Clover Operating Agreement,
dated as of May 31, 1990, between Old Dominion and Virginia Power, as the same
may have been or may be amended.
"CLOVER OWNERSHIP AGREEMENT" shall mean that certain Clover Purchase,
Construction and Ownership Agreement, dated as of May 31, 1990, between Old
Dominion and Virginia Power, as the same may have been or may be amended.
"CLOVER POWER STATION" shall mean the two 391 MW coal-fired generating units,
and related facilities constructed by Old Dominion and Virginia Power, as
tenants-in-common, near Clover, Virginia. The Clover Power Station consists of
Clover Unit 1 and Clover Unit 2.
"CLOVER POWER STATION PLAT" shall mean the plat (consisting of 5 sheets) dated
February 22, 1996, prepared by Hurt & Xxxxxxxx, Inc., styled "Composite Map of
the Property of Old Dominion Electric Cooperative and Virginia Electric & Power
Company," marked Exhibit B and recorded with the Option Agreement, as such plat
was corrected by a re-recording in the Halifax Clerk's Office.
"CLOVER REAL ESTATE" shall mean certain parcels of land and appurtenances
thereto located in Halifax County, Virginia, which are more particularly
described in Exhibit A attached to the Foundation Head Lease and the Foundation
Operating Lease, as part thereof and recorded therewith.
"CLOVER UNIT 1" shall mean the 391 MW coal-fired electric generating unit known
as "Clover Unit No. 1", located in Clover, Virginia and those facilities which
are common to the operation of Clover Unit No. 1 and Clover Unit 2, located in
Clover, Virginia. Clover Unit 1 consists of the Xxxx 0 Equipment, the Common
Facilities Equipment, the Unit 1 Foundation and the Common Facilities
Foundation, but does not include the Unit 1 Site or the Common Facilities Site.
"CLOVER UNIT 1 GENERATING FACILITY" shall mean the Unit 1 Equipment and the Xxxx
0 Foundation.
"CLOVER UNIT 1 OPERATOR" shall mean Virginia Power or any successor operating
agent appointed pursuant to Section 2.03 of the Clover Operating Agreement.
"CLOVER UNIT 2" shall mean the 391 MW coal-fired electric generating unit known
as "Clover Unit No. 2", located in Clover, Virginia and those facilities which
are common to the operation of Clover Unit 1 and Clover Unit 2. Clover Unit 2
consists of the Xxxx 0 Equipment, the Common Facilities Equipment, the Unit 2
Foundations and the Common Facilities Foundation but does not include the Unit 2
Site or the Common Facilities Site.
"COBANK" shall mean CoBank ACB, an instrumentality of the United States, or any
successor thereto.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
6
"COLLATERAL" shall have the meaning specified in the Granting Clause of the Loan
Agreement.
"COMMITMENT", with respect to the Owner Participant, shall mean the Owner
Participant's Commitment and, with respect to the Lenders, shall mean the
Lenders' Loan Commitments.
"COMMON FACILITIES" shall mean Common Facilities Equipment and Common Facilities
Foundation.
"COMMON FACILITIES EQUIPMENT" shall mean those assets described on Exhibit A-2
to the Equipment Head Lease and Exhibit A-2 to the Equipment Operating Lease.
The Common Facilities Equipment are those assets which are part of the
facilities to be used or useful in connection with the operation or maintenance
of both of Clover Unit 1 Generating Facility and the Unit 2 Foundation and the
Xxxx 0 Equipment. The Common Facilities Equipment consists of the Retained
Assets and Pollution Control Assets which are located on the Common Facilities
Site.
"COMMON FACILITIES FOUNDATION" shall mean all foundations, supports, structures
and other improvements situated on the Common Facilities Site, including those
on which the Common Facilities Equipment is situated.
"COMMON FACILITIES SITE" shall mean the land and appurtenances thereunto
belonging described on Schedule 4 to the Ground Lease and Sublease.
"COMPONENT" shall mean any appliance, part, instrument, appurtenance, accessory,
furnishing, equipment and other property of whatever nature that may from time
to time be incorporated in Clover Unit 1 except to the extent constituting
Modifications.
"CO-OWNERS" shall mean Old Dominion and Virginia Power, their successors or
permitted assigns, as tenants-in-common of the Clover Power Station.
"CO-TRUSTEE" shall mean any co-trustee appointed pursuant to Section 6.09 of the
Trust Agreement.
"CREDIT DEFAULT" shall mean an event which, with the passage of time or the
giving of notice, or both, would constitute an Event of Default under Section
16(i) of the Equipment Operating Lease or Section 16(i) of the Foundation
Operating Lease.
"DEBT RATE" shall mean 7.50 percent (7.50%) per annum.
"DEPOSIT" shall have the meaning specified in Section 1.1 of the Deposit
Agreement.
"DEPOSIT AGREEMENT" shall mean the Deposit Agreement, dated as of February 29,
1996, in substantially the form of Exhibit K to the Participation Agreement,
between Old Dominion and the Issuer.
7
"DEPOSIT PLEDGE AGREEMENT" shall mean the Deposit Pledge Agreement, dated as of
February 29, 1996, in substantially the form of Exhibit L to the Participation
Agreement, between Old Dominion, as pledgor, and the Owner Trustee, as pledgee.
"DEPRECIATION DEDUCTIONS" shall have the meaning specified in Section 2(e) of
the Tax Indemnity Agreement.
"DIRECTIVE" shall mean any instrument in writing executed in accordance with the
Loan Agreement by the Holders, or their duly authorized agent or
attorney-in-fact, representing the Required Lenders, directing the Agent to take
or refrain from taking any actions specified in such instrument or otherwise
advising the Agent.
"DOLLARS" OR THE SIGN "$" shall mean United States dollars or other lawful
currency of the United States.
"EARLY TERMINATION AMOUNT" shall mean, in relation to a Payment Undertaking
Payment Date, the amount determined in accordance with Sections 3.2 of the
Payment Undertaking Agreement with respect to such Payment Undertaking Payment
Date.
"EFFECTIVE RATE" shall have the meaning specified in Section 2(g) of the Tax
Indemnity Agreement.
"ELECTION DATE" shall mean July 5, 2014.
"ENFORCEMENT NOTICE" shall have the meaning set forth in Section 4.4 of the Loan
Agreement.
"ENGINEER" shall mean Xxxxx and XxXxxxxxx.
"ENGINEERING REPORT" shall mean the engineering report prepared by the Engineer
with respect to Clover Unit 1 pursuant to Section 4.14 of the Participation
Agreement, which shall be in form and substance reasonably satisfactory to the
Owner Participant and shall address and report on such matters as the Owner
Participant shall reasonably request.
"EQUIPMENT HEAD LEASE" shall mean Clover Unit 1 Equipment Interest Lease
Agreement, dated as of February 29, 1996, in substantially the form of Exhibit B
to the Participation Agreement, between the Equipment Head Lessor and the
Equipment Head Lessee.
"EQUIPMENT HEAD LEASE BASIC RENT" shall have the meaning specified in Section
3.3 of the Equipment Head Lease.
"EQUIPMENT HEAD LEASE BASIC TERM" shall have the meaning specified in Section
3.1 of the Equipment Head Lease.
"EQUIPMENT HEAD LEASE INTEREST" shall mean the Equipment Head Lessee's leasehold
interest in the Equipment Interest under the Equipment Head Lease.
8
"EQUIPMENT HEAD LEASE RENEWAL TERM" shall have the meaning specified in Section
3.2 of the Equipment Head Lease.
"EQUIPMENT HEAD LEASE TERM" shall have the meaning specified in Section 3.2 of
the Equipment Head Lease.
"EQUIPMENT HEAD LESSEE" shall mean the Owner Trustee, as lessee under the
Equipment Head Lease, together with its successors and permitted assigns.
"EQUIPMENT HEAD LESSOR" shall mean Old Dominion, as lessor under the Equipment
Head Lease, together with its successors and permitted assigns.
"EQUIPMENT INTEREST" shall mean (a) the right as tenant-in-common with Virginia
Power and, in the case of the Common Facilities Equipment, the Unit 2 Parties,
to nonexclusive possession of (i) the Xxxx 0 Equipment, subject to Virginia
Power's 50% undivided interest therein and the terms and conditions of the
Clover Agreements, and as to the portion of the Unit 1 Equipment which is
comprised of Pollution Control Assets, the rights of the Pollution Control
Assets Lessor as tenant-in-common with Virginia Power of the Pollution Control
Assets, and as lessor under the Pollution Control Assets Lease, (ii) the Common
Facilities Equipment, subject to Virginia Power's 50% undivided interest
therein, the terms and conditions of the Clover Agreements, and the reservation
by Old Dominion of the right to, and the right to lease, convey, transfer or
otherwise dispose of to the Unit 2 Parties the right to, nonexclusive possession
of the Common Facilities Equipment as is necessary for the use and operation of
Clover Unit 2, which reservation shall after the Closing Date be subject to (1)
Virginia Power's 50% undivided interest therein, (2) the Owner Trustee's right
to nonexclusive possession thereof, (3) Old Dominion's rights under the
Equipment Operating Lease, (4) the terms and conditions of the Clover
Agreements, (5) Permitted Liens, and as to the portion of the Common Facilities
Equipment which is comprised of Pollution Control Assets, the rights of the
Pollution Control Assets Lessor as tenant-in-common with Virginia Power of the
Pollution Control Assets and as lessor under the Pollution Control Assets Lease,
(b) all rights and obligations as tenant-in-common with Virginia Power in the
Retained Assets and as lessee under the Pollution Control Assets Lease which are
attributable to the Unit 1 Equipment by Virginia law as modified by the Clover
Agreements, and (c) 50% of the rights and obligations as tenant-in-common with
Virginia Power in the Retained Assets and as Lessee under the Pollution Control
Assets Lease which are attributable to the Common Facilities Equipment by
Virginia law as modified by the Clover Agreements.
"EQUIPMENT INTEREST COST" shall mean $301,800,000, which is the fair market
value of the Equipment Interest on the Closing Date as set forth in the
Appraisal.
"EQUIPMENT OPERATING LEASE" shall mean the Equipment Operating Lease Agreement,
dated as of February 29, 1996, in substantially the form of Exhibit F to the
Participation Agreement, between the Lessor and the Lessee.
9
"EQUITY INVESTMENT" shall mean the Owner Participant's investment in the Owner
Trust contemplated by Section 2.1 of the Participation Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law.
"EVENT OF DEFAULT" shall have the meaning specified in Section 16 of the
Equipment Operating Lease or in Section 16 of the Foundation Operating Lease, as
the case may be.
"EVENT OF LOSS" shall mean, and shall be deemed to have occurred upon the
occurrence of, any of the following events:
(i) loss of Clover Unit 1 or use thereof due to destruction or
damage to Clover Unit 1 that renders repair uneconomic or that
renders Clover Unit 1 permanently unfit for normal use;
(ii) any damage to Clover Unit 1 that results in an insurance
settlement with respect to such damage on the basis of a total
loss or an agreed constructive or compromised total loss;
(iii) the condemnation, seizure of, expropriation or requisition of
title to Clover Unit 1 or the Real Property by any
Governmental Entity which shall have resulted in loss of title
to Clover Unit 1 or Real Property or the loss by the Owner
Trustee of the Equipment Head Lease Interest or the Foundation
Head Lease Interest, in either case for a period of the lesser
of three years or the remaining portion of the Term, or,
unless waived by the Owner Trustee, the requisition or taking
of the use but not title of Clover Unit 1 or the Real Property
by any Governmental Entity under the power of eminent domain
or otherwise, if such loss of possession shall be for an
indefinite period or a stated period which extends beyond the
Expiration Date;
(iv) unless waived in writing by the Owner Participant and only in
circumstances where the termination of the Equipment Head
Lease, the Foundation Head Lease, the Equipment Operating
Lease or Foundation Operating Lease shall remove the basis of
the regulation described below, subjection of the Owner
Participant or the Owner Trustee to any public utility
regulation of any Governmental Entity which in the opinion of
the Owner Participant is burdensome, or the subjection of the
Owner Participant's or the Owner Trustee's interest in the
Equipment Head Lease, the Foundation Head Lease, the
Foundation Operating Lease or the Equipment Operating Lease to
any rate of return regulation by any Governmental Entity, in
either case by reason of the participation of the Owner
Trustee or the Owner Participant in the transactions
contemplated by the Operative Documents which cannot be
avoided by transfer of the Beneficial Interest or the Lessor's
Unit 1 Interest to another Person without detriment to the
Owner Participant and not, in any event, as a result of (a)
investments, loans or other business activities of
10
the Owner Participant or its Affiliates in respect of
equipment or facilities similar in nature to Clover Unit 1 or
any part thereof or in any other electrical, steam,
cogeneration or other energy or utility related equipment or
facilities or the general business or other activities of the
Owner Participant or Affiliates or the nature of any of the
properties or assets from time to time owned, leased,
operated, managed or otherwise used or made available for use
by the Owner Participant or its Affiliates or (b) a failure of
the Owner Participant to perform routine, administrative or
ministerial actions the performance of which would not subject
the Owner Participant to any adverse consequence (as
determined by the Owner Participant, in its sole discretion
acting in good faith); or
(v) the Holders of the Series B Loan Certificates shall have
elected to cause the Series B Loan Certificates to be prepaid
pursuant to Section 10.2(a) of the Participation Agreement and
such Series B Loan Certificates shall not have been refinanced
on or before the Mandatory Prepayment Date specified in such
notice.
The date of occurrence of an Event of Loss described in clauses (i) or (ii)
shall be the date of the destruction or damage to Clover Unit 1. The date of
occurrence of an Event of Loss described in clause (iii) shall be the date of
the expiration of the applicable period in the case of a taking of title or loss
of Clover Unit 1 or the Real Property or in the case of a taking of use, the
date of such taking. The date of occurrence of an Event of Loss described in
clause (iv) shall be the date of imposition of such regulation following the
exhaustion of all appeals, if any, initiated by the Owner Trustee or the Owner
Participant in its sole and absolute discretion. The date of occurrence of an
Event of Loss described in clause (v) shall be the Mandatory Prepayment Date
(which shall be a Termination Date).
"EXCEPTED PAYMENTS" shall mean and include (i)(A) any indemnity (whether or not
constituting Supplemental Rent or Foundation Supplemental Rent and whether or
not an Event of Default exists) payable to the Trust Company, the Owner Trustee
or the Owner Participant or to their respective Affiliates, directors, officers,
employees, agents, servants, successors and permitted assigns (other than the
Agent) pursuant to Section 2.4, 8.1 or 8.2 of the Participation Agreement,
Section 7.01 of the Trust Agreement, (and any payments of indemnity under the
Tax Indemnity Agreement reflected as an adjustment of Basic Rent or Foundation
Basic Rent) or (B) any amount payable by Old Dominion to the Owner Trustee or to
the Owner Participant to reimburse any such Person for its costs and expenses in
exercising its rights under the Operative Documents, (ii) (A) insurance
proceeds, if any, payable to the Owner Trustee or the Owner Participant under
insurance separately maintained by the Owner Trustee or the Owner Participant
with respect to Clover Unit 1 as permitted by Section 11 of the Equipment
Operating Lease or Section 11 of the Foundation Operating Lease or (B) proceeds
of personal injury or property damage liability insurance maintained under any
Operative Document for the benefit of the Owner Trustee or the Owner
Participant, (iii) any amounts payable under any Operative Documents to
reimburse the Owner Trustee or the Owner Participant (including the reasonable
expenses of the Owner Trustee or the Owner Participant incurred in connection
with any such payment) in performing or complying with any of the obligations of
Old Dominion under and as permitted by any Operative Document, (iv) any amount
payable to the Owner Participant as
11
the purchase price of the Owner Participant's right and interest in the
Collateral, (v) any payments, insurance proceeds or other amounts with respect
to any portion of the Equipment Head Lease Interest or the Foundation Head Lease
Interest which has been released from the Liens of the Loan Agreement and the
Leasehold Mortgage, (vi) any payments or distributions to the Owner Trustee or
the Owner Participant attributable to any Qualifying Security, the Pledge
Agreement, or any Qualifying Letter of Credit, and (vii) any payments in respect
of interest, or any payments made on an After-Tax Basis, to the extent
attributable to payments referred to in clause (i) through (vi) above that
constitute Excepted Payments.
"EXCEPTED RIGHTS" shall have the meaning specified in Section 5.2 of the Loan
Agreement.
"EXCHANGE ACT" shall mean Securities Exchange Act of 1934, as amended.
"EXCLUDED PROPERTY" shall mean Excepted Payments and Excepted Rights,
collectively.
"EXCLUDED TAXES" shall have the meaning specified in Section 8.2 of the
Participation Agreement.
"EXPIRATION DATE" shall mean January 5, 2018.
"FAIR MARKET SALES VALUE", with respect to the Lessor's Unit 1 Interest, shall
mean the cash price obtainable for the Lessor's Unit 1 Interest, in an arm's
length sale between an informed and willing purchaser under no compulsion to
purchase and an informed and willing seller under no compulsion to sell, without
regard to the rights of Virginia Power set forth in Section 6.3 of the Equipment
Head Lease and Section 6.3 of the Foundation Head Lease, assuming that (i) the
conditions contained in Sections 7 and 8 of the Equipment Operating Lease and
the Foundation Operating Lease shall have been complied with in all respects and
the Lessor's Unit 1 Interest is free and clear of all Liens (other than Lessor's
Liens and Owner Participant's Liens) (except for purposes of Section 17 of the
Equipment Operating Lease or the Foundation Operating Lease, as to which the
Lessor's Unit 1 Interest, shall be valued on an "as-is", "where-is" basis and
shall take into account all Liens (other than Lessor's Liens or Owner
Participant's Liens). If the Fair Market Sales Value of the Lessor's Unit 1
Interest is to be determined during the continuance of an Event of Default or in
connection with the exercise of remedies by the Owner Trustee pursuant to
Section 17 of the Equipment Operating Lease or the Foundation Operating Lease,
such value shall be determined by an appraiser appointed solely by the Owner
Trustee; PROVIDED, HOWEVER, in any such case where the Owner Trustee shall be
unable to obtain constructive possession sufficient to realize the economic
benefit of the Lessor's Unit 1 Interest, Fair Market Sales Value of the Lessor's
Unit 1 Interest shall be deemed equal to $0. Upon any determination of Fair
Market Sales Value of the Lessor's Unit 1 Interest, such Fair Market Sales Value
shall be allocated to the Equipment Interest and the Foundation Interest
proportionally to the value the Equipment Interest Cost or the Foundation
Interest Cost bears to the aggregate value of such costs. If the parties are
unable to agree upon a Fair Market Sales Value within 30 days after a request
therefor has been made, the Fair Market Sales Value of the Lessor's Unit 1
Interest shall be determined by appraisal. The Owner Participant and Old
Dominion will consult with the intent of selecting a mutually acceptable
Independent Appraiser. If a mutually
12
acceptable Independent Appraiser is selected, the Fair Market Sales Value shall
be determined by such Independent Appraiser. If Old Dominion and the Owner
Participant are unable to agree upon a single Independent Appraiser within such
15-day period, the Owner Participant will retain an Independent Appraiser.
Within 15 days after the Owner Participant's selection of an Independent
Appraiser, Old Dominion shall select an Independent Appraiser. If Old Dominion
fails to retain an Independent Appraiser within such period, the Fair Market
Sales Value shall be determined by the Independent Appraiser retained by the
Owner Participant. The Independent Appraiser selected by Old Dominion and the
Independent Appraiser selected by the Owner Participant shall select a consensus
Independent Appraiser within 10 days. If the Independent Appraisers cannot agree
on a consensus Independent Appraiser within 10 days, the consensus Independent
Appraiser shall be selected by the American Arbitration Association. If the
parties are able to agree upon a single Independent Appraiser or the two
Independent Appraisers are able to agree upon a consensus Independent Appraiser,
the single Independent Appraiser or the three Independent Appraisers, as the
case may be, shall within 30 days make a determination of such Fair Market Sales
Value. If there shall be a panel of three Independent Appraisers, the appraisal
which differs most from the other two appraisals with respect to the Lessor's
Unit 1 Interest, shall be excluded and the remaining two appraisals shall be
averaged and such average shall constitute Fair Market Sales Value of the
Lessor's Xxxx 0 Xxxxxxxx. Xxxx and expenses relating to all appraisals shall be
payable by Old Dominion.
"FEDERAL POWER ACT" shall mean the Federal Power Act, as amended.
"FERC" shall mean the Federal Energy Regulatory Commission of the United States
or any successor agency thereto.
"FERC ORDER" shall mean the order issued by FERC on November 20, 1995 (Docket
No. ES96-1-000) under Section 204 of the Federal Power Act as amended on
February 26, 1996.
"FINAL DETERMINATION" with respect to a Loss shall mean (1) a decision,
judgment, decree or other order by any court of competent jurisdiction, which
decision, judgment, decree or other order has become final (i.e., when all
allowable appeals have been exhausted by either party to the action); PROVIDED,
HOWEVER, that in no event shall the Owner Participant be required to appeal to
the United States Supreme Court, (2) a closing agreement entered into under
Section 7121 of the Code or any other settlement agreement entered into in
connection with an administrative or judicial proceeding, or (3) the expiration
of the time for instituting a claim for refund, or if such a claim was filed,
the expiration of the time for instituting suit with respect thereto.
"FINAL UNDERTAKING PAYMENT DATE" shall mean January 5, 2018.
"FIRST SEVERANCE AGREEMENT" shall mean the Personal Property Agreement, dated as
of December 13, 1994, between Old Dominion and Virginia Power.
"FORCE MAJEURE" shall have the meaning specified in Section 1.36 of the Clover
Operating Agreement.
13
"FORM U-7D" shall mean the certificate to be filed pursuant to Rule 7(d) of the
Holding Company Act for the purpose of exempting the Owner Participant and the
Owner Trustee from registration under the Holding Company Act.
"FOUNDATION BASIC RENT" shall mean all rent payable by the Foundation Lessee to
the Foundation Lessor pursuant to Section 3.2 of the Foundation Operating Lease,
as the same may be adjusted from time to time pursuant to Section 3.4 of the
Foundation Operating Lease.
"FOUNDATION HEAD LEASE" shall mean the Clover Unit 1 Foundation Interest Lease
Agreement, dated as of February 29, 1996, in substantially the form of Exhibit C
to the Participation Agreement, between the Foundation Head Lessor and the
Foundation Head Lessee.
"FOUNDATION HEAD LEASE BASIC RENT" shall have the meaning specified in Section
3.3 of the Foundation Head Lease.
"FOUNDATION HEAD LEASE BASIC TERM" shall have the meaning specified in Section
3.1 of the Foundation Head Lease.
"FOUNDATION HEAD LEASE INTEREST" shall mean the Foundation Head Lessee's
leasehold interest in the Foundation Interest under the Foundation Head Lease.
"FOUNDATION HEAD LEASE RENEWAL TERM" shall have the meaning specified in Section
3.2 of the Foundation Head Lease.
"FOUNDATION HEAD LEASE TERM" shall have the meaning specified in Section 3.2 of
the Foundation Head Lease.
"FOUNDATION HEAD LESSEE" shall mean the Owner Trustee, as lessee under the
Foundation Head Lease, together with its successors and permitted assigns.
"FOUNDATION HEAD LESSOR" shall mean Old Dominion, as lessor under the Foundation
Head Lease, together with its successors and permitted assigns.
"FOUNDATION INTEREST" shall mean (a) the right as tenant-in-common with Virginia
Power and, in the case of the Common Facility Foundation, the Unit 2 Parties, to
non exclusive possession of (i) the Xxxx 0 Foundation, subject to Virginia
Power's 50% undivided interest therein, a reservation for the Unit 2 Parties of
rights to the extent necessary to support Common Facilities Equipment located in
the scrubber building situated on the Unit 1 site and the terms and conditions
of the Clover Agreements, and (ii) the Common Facilities Foundation, subject to
Virginia Power's 50% undivided interest therein, the terms and conditions of the
Clover Agreements and the reservation by Old Dominion of the right to, and the
right to lease, convey, transfer or otherwise dispose of to the Unit 2 Parties
the right to, nonexclusive possession of the Common Facilities Foundation as is
necessary for the use and operation of Clover Unit 2, which reservation shall
after the Closing Date be subject to (1) Virginia Power's 50% undivided interest
therein, (2) Owner Trustee's right to nonexclusive possession thereof, (3) Old
14
Dominion's rights under the Foundation Operating Lease, and (4) the terms and
conditions of the Clover Agreements, (b) all of the rights and obligations as
tenant-in-common with Virginia Power which are attributable to the Unit 1
Foundation by Virginia law as modified by the Clover Agreements and (c) 50% of
the rights and obligations as tenant-in-common with Virginia Power which are
attributable to the Common Facilities Foundation by Virginia law as modified by
the Clover Agreements.
"FOUNDATION INTEREST COST" shall mean $13,200,000, which is the fair market
value of the Foundation Interest on the Closing Date as set forth in the
Appraisal.
"FOUNDATION LESSEE" shall mean Old Dominion, as lessee under the Foundation
Operating Lease, together with its successors and permitted assigns.
"FOUNDATION LESSOR" shall mean the Owner Trustee, as lessor under the Foundation
Operating Lease, together with its successors and permitted assigns.
"FOUNDATION OPERATING LEASE" shall mean the Foundation Operating Lease
Agreement, dated as of February 29, 1996, in substantially the form of Exhibit G
to the Participation Agreement, between the Foundation Lessor and the Foundation
Lessee.
"FOUNDATION PURCHASE OPTION" shall have the meaning specified in paragraph (a)
of Section 15.1 of the Foundation Operating Lease.
"FOUNDATION PURCHASE OPTION PRICE" shall mean $18,049,884.
"FOUNDATION RENT" shall mean all Foundation Basic Rent and Foundation
Supplemental Rent.
"FOUNDATION RETURN OPTION" shall have the meaning specified in paragraph (c) of
Section 15.1 of the Foundation Operating Lease.
"FOUNDATION SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
obligations (other than Foundation Basic Rent) which the Foundation Lessee
assumes or agrees to pay under the Foundation Operating Lease to the Foundation
Lessor or any other Person, including, but not limited to, Termination Value and
if and to the extent applicable, the Foundation Purchase Option Price or the
Foundation Walk Away Payment.
"FOUNDATION WALK AWAY PAYMENT" shall mean an amount equal to the excess (if any)
of Termination Value with respect to the Foundation Interest over the Fair
Market Sales Value of the Foundation Interest, both determined as of the
Expiration Date (minus a reasonable allowance for hypothetical disposition
costs), such excess not to exceed such Termination Value minus 20% of the
Foundation Interest Cost; PROVIDED that under all circumstances the Foundation
Walk Away Payment when combined with the Walk Away Payment, the Basic Rent and
Foundation Basic Rent payable on the Expiration Date, shall be at least equal to
the outstanding principal amount of and accrued interest on the Loan
Certificates on the Expiration Date.
15
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENTAL ENTITY" shall mean and include any national government, any
political subdivision of a national government or of any state, country or local
jurisdiction therein or any board, commission, department, division, organ,
instrumentality, court or agency of any thereof.
"GRANTING CLAUSE DOCUMENTS" shall have the meaning specified in the Granting
Clause of the Loan Agreement.
"GROUND INTEREST" shall mean (a) the right as tenant-in-common with Virginia
Power and, in the case of the Common Facilities Site, the Unit 2 Parties, to
nonexclusive possession of (i) the Unit 1 Site, subject to Virginia Power's 50%
undivided interest therein, a reservation for the Unit 2 Parties of rights to
the extent necessary to support for the benefit of the Common Facilities
Equipment and the Common Facilities Foundation located in and under the scrubber
building situated on the Unit 1 site, and the terms and conditions of the Clover
Agreements, and (ii) the Common Facilities Site, subject to Virginia Power's 50%
undivided interest therein, the terms and conditions of the Clover Agreements,
and the reservation by Old Dominion of the right to lease, convey, transfer or
otherwise dispose of to the Unit 2 Parties the right to, nonexclusive possession
of the Common Facilities Site as is necessary for the use and operation of
Clover Unit 2, subject to (1) Virginia Power's 50% undivided interest therein,
(2) the Owner Trustee's right to nonexclusive possession thereof, (3) the terms
and conditions of the Clover Agreements, and (4) Permitted Liens, (b) all of Old
Dominion's rights and obligations as tenant-in-common of the Unit 1 Site which
are attributable to the Unit 1 Site by Virginia law as modified by the Clover
Agreements and (c) 50% of Old Dominion's rights and obligations as
tenant-in-common of the Common Facilities Site which are attributable to the
Common Facilities Site by Virginia law as modified by the Clover Agreements.
"GROUND LEASE AND SUBLEASE" shall mean a Deed of Ground Lease and Sublease
Agreement, in substantially the form of Exhibit A to the Option Agreement.
"GROUND LEASE INTEREST" shall mean the Ground Lessee's leasehold interest in the
Ground Interest.
"GROUND LEASE TERM" shall mean the Basic Ground Lease Term and any Renewal
Ground Lease Term or Terms elected by the Ground Lessee pursuant to Section 2.1
of the Ground Lease and Sublease.
"GROUND LESSEE" shall mean the Owner Trustee, as lessee under the Ground Lease
and Sublease, together with its successors and permitted assigns.
"GROUND LESSOR" shall mean Old Dominion, as lessor under the Ground Lease and
Sublease, together with its successors and permitted assigns.
"GROUND SUBLEASE TERM" shall mean the Ground Sublease Term described in Section
4.2 of the Ground Lease and Sublease.
16
"GUARANTOR" shall mean any Person guaranteeing the obligations of any Transferee
pursuant to Section 5.1 of the Participation Agreement.
"HALIFAX CLERK'S OFFICE" shall mean the Clerk's Office of the Circuit Court of
Halifax County, Virginia.
"HIGHEST RATE" shall have the meaning specified in Section 4(b) of the Tax
Indemnity Agreement.
"HOLDERS" and "HOLDERS OF LOAN CERTIFICATES" shall have the meaning specified in
Section 2.7 of the Loan Agreement.
"HOLDING COMPANY ACT" shall mean the Public Utility Holding Company Act of 1935,
as amended.
"INCOME INCLUSION" shall have the meaning specified in Section 4(a) of the Tax
Indemnity Agreement.
"INDEMNITEE" shall have the meaning specified in Section 8.1(a) of the
Participation Agreement.
"INDENTURE TRUSTEE" shall mean Crestar Bank, as the trustee under the Old
Dominion Indenture or any successor thereto.
"INDEPENDENT APPRAISER" shall mean a Person independent of the Owner Participant
and Old Dominion having experience in the business of evaluating facilities
similar to Clover Unit 1.
"INDEPENDENT ENGINEER" shall mean an independent engineer selected by the Owner
Participant and, so long as no Event of Default shall have occurred and be
continuing, reasonably acceptable to Old Dominion.
"INDEPENDENT PUBLIC ACCOUNTANTS" shall have the meaning specified in Section
4(d) of the Tax Indemnity Agreement.
"INDEPENDENT TAX COUNSEL" shall mean independent tax counsel reasonably
acceptable to Old Dominion and the Owner Participant.
"INTEREST DEDUCTIONS" shall have the meaning specified in Section 2(c) of the
Tax Indemnity Agreement.
"INTERIM TERM" shall mean the period commencing on the Closing Date and ending
on (but excluding) the Basic Term Commencement Date.
"INTERMEDIARY" shall have the meaning specified in Section 3.4(c) of the
Equipment Operating Lease or the Foundation Operating Lease, as the case may be.
17
"IRS" shall mean the Internal Revenue Service of the United States Department of
Treasury or any successor agency.
"ISSUER" shall mean Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland", New York Branch, as issuer of the Deposit pursuant to the
Deposit Agreement, together with its successors and permitted assigns.
"LEASEHOLD MORTGAGE" shall mean the Leasehold Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of February 29, 1996, in
substantially the form of Exhibit I to the Participation Agreement, made by the
Owner Trustee, as Grantor, Xxxxx X. Xxxx and C. Xxxxxxxxxx Xxxxxxxx, as
Trustees, and Utrecht-America, as beneficiary thereunder and as Agent.
"LENDERS" shall mean the Lenders under the Loan Agreement.
"LESSEE" shall mean Old Dominion, as lessee under the Equipment Operating Lease,
together with its successors and permitted assigns.
"LESSEE GROUP" shall have the meaning specified in Section 3(b) of the Tax
Indemnity Agreement.
"LESSEE PERSON" shall have the meaning specified in Section 3(b) of the Tax
Indemnity Agreement.
"LESSEE'S UNIT 1 INTEREST" shall mean Old Dominion's leasehold interest in the
Equipment Interest under the Equipment Operating Lease, Old Dominion's leasehold
interest in the Foundation Interest under the Foundation Operating Lease and Old
Dominion's rights in the Assigned Clover Interests reassigned to it by the Owner
Trustee under the Clover Agreements Assignment.
"LESSOR" shall mean the Owner Trustee, acting as lessor under the Equipment
Operating Lease, together with its successors and permitted assigns.
"LESSOR EVENT OF DEFAULT" shall mean the occurrence of any of the following
events (whether any such event shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
Governmental Entity):
(a) a breach of the covenant of the Old Dominion's right of
quiet enjoyment under Section 4.2 of the Equipment Operating Lease or
the Foundation Operating Lease by the Owner Participant which, if
capable of remedy, remains unremedied for twenty Business Days after
receipt by the Owner Participant of notice from Old Dominion; or
(b) the Trust Agreement shall have been revoked by the Owner
Participant in violation of the terms of the Operative Documents and,
if capable of remedy, such
18
violation remains unremedied for ten Business Days after receipt by the
Owner Participant of notice from Old Dominion; or
(c) the Owner Participant shall fail to observe or perform its
covenant in Section 5.2 of the Participation Agreement in respect of a
Owner Participant's Lien that poses a material risk of loss, sale or
forfeiture of the Equipment Interest or the Foundation Interest or
constitutes an impermissible encumbrance under Section 14.06 of the Old
Dominion Indenture and remains unremedied in excess of 30 days after
receipt by the Owner Participant of notice from Old Dominion; or
(d) the Owner Participant shall (i) commence a voluntary case
or other proceeding seeking relief under Title 11 of the Bankruptcy
Code or liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect, or apply for or consent to the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or (ii)
consent to, or fail to controvert in a timely manner, any such relief
or to the appointment of or taking possession by any such official in
any such voluntary case or such other proceeding, or (iii) admit in
writing its inability to pay its debts generally as they come due, or
(iv) make a general assignment for the benefit of creditors, or (v)
take any corporate action to authorize any of the foregoing; or
(e) an involuntary case or other proceeding shall be commenced
against the Owner Participant seeking (i) liquidation, reorganization
or other relief with respect to it or its debts under Title 11 of the
Bankruptcy Code or any bankruptcy, insolvency or other similar law now
or hereafter in effect, or (ii) seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official, or (iii) the
winding-up or liquidation of the Owner Participant, and such
involuntary case of other proceeding shall remain undismissed and
unstayed for a period of 60 days; or
(f) the Owner Participant shall fail to observe or perform its
covenant in Section 5.1 of the Participation Agreement and such failure
remains unremedied for ten Business Days after receipt by the Owner
Participant of notice from Old Dominion.
"LESSOR GROUP" shall have the meaning specified in Section 4(e) of the Tax
Indemnity Agreement.
"LESSOR'S AVAILABLE CAPACITY" shall mean a portion of the Available Capacity to
the extent, but only to the extent, derived from Clover Unit 1.
"LESSOR'S LIEN" shall mean any Lien on the Trust Estate arising as a result of
(i) claims against or affecting the Trust Company, in its individual capacity,
or any Affiliate thereof not related to any Operative Document or the
transactions contemplated thereby, (ii) any act or omission of the Trust
Company, in its individual capacity, or any Affiliate thereof that is not
related to any Operative Document or the transactions contemplated thereby or
that is in breach of any
19
covenant or agreement of the Trust Company, in its individual capacity,
specified therein, (iii) Taxes imposed upon, or Claims against, the Trust
Company, in its individual capacity, or any Affiliate thereof which are not
indemnified against by Old Dominion pursuant to any Operative Documents or (iv)
Claims against or affecting the Trust Company, in its individual capacity, or
any Affiliate thereof arising out of the voluntary or involuntary transfer by
the Trust Company of any portion of the interest of the Trust Company in the
Lessor's Unit 1 Interest (other than a transfer contemplated by the Operative
Documents or any transfer during the continuance of an Event of Default);
PROVIDED, HOWEVER, that any such Lien shall not constitute a Lessor's Lien so
long as (i) any such Lien is being diligently contested in good faith by
appropriate proceedings and neither such Lien nor such proceedings involves a
material danger of the sale, forfeiture or loss of the Trust Estate and (ii) any
such Lien shall not constitute an impermissible encumbrance under Section 14.06
of the Old Dominion Indenture.
"LESSOR'S PERCENTAGE" shall mean 50% with respect to any Component or other
assets (including any repaired or replaced facilities constituting a part of
Clover Unit 1 in accordance with Section 10.3 of the Equipment Operating Lease
and the Foundation Operating Lease) constituting a part of the Unit 1 Equipment
or the Xxxx 0 Foundation and 25% with respect to any Component or other assets
(including any repaired or replaced facilities constituting a part of Clover
Unit 1 in accordance with Section 10.3 of the Equipment Operating Lease and the
Foundation Operating Lease) constituting Common Facilities Equipment or Common
Facilities Foundation.
"LESSOR'S UNIT 1 INTEREST" shall mean the Equipment Head Lease Interest, the
Foundation Head Lease Interest, the Option Interest and the Assignee's interest
in the Assigned Clover Interests.
"LIEN" shall mean any mortgage, pledge, lien, charge, encumbrance, lease,
exercise of rights, security interest, title retention or claim.
"LOAN AGREEMENT" shall mean the Loan and Security Agreement, dated as of
February 29, 1996, in substantially the form of Exhibit H to the Participation
Agreement, between the Owner Trustee and Utrecht-America, as Lender and as
Agent.
"LOAN BANKRUPTCY DEFAULT" shall mean an event that is, or in the case of Section
4.2(f) of the Loan Agreement with the passage of time would become, a Loan Event
of Default under Section 4.2(e) or (f) of the Loan Agreement.
"LOAN CERTIFICATE REGISTER" shall have the meaning specified in Section 2.7 of
the Loan Agreement.
"LOAN CERTIFICATES" shall have the meaning specified in Section 2.1 of the Loan
Agreement.
"LOAN COMMITMENTS" shall mean the Series A Loan Commitment and the Series B Loan
Commitment.
"LOAN EVENT OF DEFAULT" shall have the meaning specified in Section 4.2 of the
Loan Agreement.
20
"LOAN MATURITY DATE" shall mean January 5, 2018.
"LOAN PAYMENT DEFAULT" shall mean failure of the Owner Trustee to make any
payment in respect of the principal of, or interest on, any Loan Certificates
when the same shall have become due.
"LOAN REFINANCING DATE" shall mean any date (which shall be a Termination Date)
on which the Loan Certificates of a Series are refinanced pursuant to Section
10.2 or 10.3 of the Participation Agreement.
"LOANS" shall mean the loans evidenced by the Series A Loan Certificates and the
Series B Loan Certificates.
"LOSS" shall have the meaning specified in Section 4(a) of the Tax Indemnity
Agreement.
"LOSS OF DEDUCTIONS" shall have the meaning specified in Section 4(a) of the Tax
Indemnity Agreement.
"MANAGEMENT AGREEMENT" shall mean a Management Agreement between the Lessor and
Owner Trustee, substantially in the form of Exhibit C to the Equipment Operating
Lease.
"MANDATORY PREPAYMENT DATE" shall mean any January 5, April 5, July 5 or October
5 occurring after January 5, 1999, established by the Holders of the Series B
Loan Certificates as the date on which the Series B Loan Certificates must be
prepaid pursuant to Section 2.10 of the Loan Agreement.
"MEMBER OF THE LESSOR GROUP" shall have the meaning specified in Section 4(e) of
the Tax Indemnity Agreement.
"MINIMUM CREDIT RATINGS" shall have the meaning specified in Section 7.7 of the
Participation Agreement.
"MODIFICATION" shall mean either a Required Modification or an Optional
Modification.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. and any successor thereto.
"MORTGAGEE" shall mean the beneficiary of the Leasehold Mortgage.
"MORTGAGOR" shall mean the Owner Trustee, as grantor under the Leasehold
Mortgage, together with its successors and permitted assigns.
"NET ECONOMIC RETURN" shall mean the Owner Participant's anticipated (i) net
after-tax economic yield (computed using the multiple investment sinking fund
method) and (ii) net after-tax cash flow, based upon the same assumptions used
by the Owner Participant in making the original computations implicit in (i) the
schedule of Basic Rent attached as Schedule 1 to
21
Equipment Operating Lease and (ii) the schedule of Foundation Basic Rent
attached as Schedule 1 to the Foundation Operating Lease.
"NEW LOAN" shall mean a loan having a principal amount, interest rate, maturity,
amortization and such other terms as set forth in Schedule 3 to the Equipment
Operating Lease arranged by the Lessee in accordance with Section 15.3 of the
Equipment Operating Lease.
"1996 SERIES A BONDS" shall mean the First Mortgage Bond, 1996 Series A in the
face amount of $25,565,961.82 issued under the Old Dominion Indenture.
"1996 SERIES B BONDS" shall mean the First Mortgage Bond, 1996 Series B, issued
under the Old Dominion Indenture to refund the 1996 Series A Bonds.
"NONSEVERABLE MODIFICATION" shall mean any Modification that is not readily
removable without causing material damage to Clover Unit 1.
"OBSOLESCENCE TERMINATION DATE" shall have the meaning specified in Section 14.1
of the Equipment Operating Lease.
"OFFICER'S CERTIFICATE" shall mean with respect to any Person, a certificate
signed by the Chairman of the Board, the President, or a Vice President of such
Person or any person authorized by or pursuant to the organizational documents,
the by-laws or any resolution of the Board of Directors or Executive Committee
of such Person (whether general or specific) to execute, deliver and take
actions on behalf of such Person in respect of any of the Operative Documents.
"OLD DOMINION" shall mean Old Dominion Electric Cooperative, a wholesale power
supply cooperative organized under the laws of the Commonwealth of Virginia,
together with its successors.
"OLD DOMINION INDENTURE" shall mean the Indenture of Mortgage and Deed of Trust,
dated as of May 1, 1992, made by Old Dominion to the Indenture Trustee, as
supplemented by the First Supplemental Indenture dated as of August 1, 1992, the
Second Supplemental Indenture dated as of December 1, 1992, the Third
Supplemental Indenture dated as of May 1, 1993, the Fourth Supplemental
Indenture dated as of December 15, 1994, the Fifth Supplemental Indenture dated
as of February 29, 1996 and as hereinafter amended and supplemented from time to
time.
"OLD DOMINION'S BONDS" shall mean the First Mortgage Bonds issued by Old
Dominion under the Old Dominion Indenture.
"OPERATIVE DOCUMENTS" shall mean the Participation Agreement, the Severance
Agreements, the Equipment Head Lease, the Foundation Head Lease, the Equipment
Operating Lease, the Foundation Operating Lease, the Clover Agreements
Assignment, the Option Agreement, the Ground Lease and Sublease (if and when
executed), the Loan Agreement, the Leasehold Mortgage, the Loan Certificates,
the Trust Agreement, the Tax Indemnity Agreement, the
22
Deposit Agreement, the Certificate of Deposit, the Deposit Pledge Agreement, the
Payment Undertaking Agreement, the Payment Undertaking Pledge Agreement and the
Pledge Agreement.
"OPTION AGREEMENT" shall mean the Option Agreement to Lease dated as of February
29, 1996, in substantially the form of Exhibit D to the Participation Agreement
between Old Dominion and the Owner Trustee.
"OPTION INTEREST" shall mean the Owner Trustee's right and option to enter into
the Ground Lease and Sublease.
"OPTIONAL MODIFICATION" shall have the meaning specified in Section 8.2 of the
Equipment Operating Lease or the Foundation Operating Lease, as the case may be.
"ORIGINAL LENDERS" shall mean Utrecht-America, as purchaser of the Series A Loan
Certificates and the Series B Loan Certificates.
"OVERALL TRANSACTION" shall mean the transactions contemplated by the Operative
Documents.
"OVERDUE RATE" shall mean 1.0% per annum over the rate of interest publicly
announced from time to time by First Union National Bank of Florida at its
principal office as its prime lending rate for domestic commercial loans, such
rate to change as and when such prime lending rate changes. For purpose of this
definition, "prime lending rate" shall mean that rate announced by the First
Union National Bank of Florida from time to time as its prime rate as that rate
may change from time to time with changes to occur on the date such Bank's prime
rate changes. Such Bank's prime rate is one of several interest rate bases used
by the Bank. The Bank lends at rates both above and below the Bank's prime rate,
and Old Dominion acknowledges and agrees that the prime rate is not represented
or not intended to be the lowest or most favorable rate of interest offered by
the Bank.
"OWNER PARTICIPANT" shall mean First Union National Bank of Florida, a national
banking association.
"OWNER PARTICIPANT'S COMMITMENT" shall mean $54,755,411.
"OWNER PARTICIPANT'S LIEN" shall mean any Lien on the Trust Estate arising as a
result of (i) claims against or affecting the Owner Participant or any Affiliate
thereof not related to any Operative Document or the transactions contemplated
thereby, (ii) any act or omission of the Owner Participant or any Affiliate
thereof that is not related to any Operative Document or the transactions
contemplated thereby or that is in breach of any covenant or agreement of the
Owner Participant specified therein, (iii) Taxes or claims against the Owner
Participant or any Affiliate thereof which are not indemnified against by Old
Dominion pursuant to the Operative Documents or (iv) Claims against or affecting
the Owner Participant or any Affiliate thereof arising out of the voluntary or
involuntary transfer by the Owner Participant of any portion of the interest of
the Owner Participant in the Beneficial Interest (other than a transfer
contemplated by the Operative Documents or any transfer during the continuance
of an Event of Default);
23
PROVIDED, HOWEVER, that any such Lien shall not constitute an Owner
Participant's Lien hereunder so long as (i) any such Lien is being diligently
contested in good faith by appropriate proceedings and neither such Lien nor
such proceedings involves a material danger of the sale, forfeiture or loss of
the Trust Estate and (ii) any such Lien shall not constitute an impermissible
encumbrance under Section 14.06 of the Old Dominion Indenture.
"OWNER PARTICIPANT'S TAX COUNSEL" shall mean Xxxxxxxxxx & Xxxxx LLP, or such
other tax counsel as may be selected by the Owner Participant and reasonably
acceptable to Old Dominion.
"OWNER TRUST" shall mean the grantor trust created by the Trust Agreement.
"OWNER TRUSTEE" shall mean State Street Bank and Trust Company, a state
chartered trust company organized and existing under the laws of the
Commonwealth of Massachusetts, not in its individual capacity except as
expressly provided in the relevant Operative Document to which it is a party,
but solely as owner trustee under the Trust Agreement, and each other Person
which may from time to time be acting as the Owner Trustee in accordance with
the provisions of the Trust Agreement.
"PARTICIPANTS" shall mean the Owner Participant and the Lenders.
"PARTICIPATION AGREEMENT" shall mean the Participation Agreement, dated as of
February 29, 1996, among Old Dominion, the Owner Trustee, the Owner Participant
and Utrecht-America.
"PAYMENT DATE" shall mean January 5, 1998 and each succeeding January 5
thereafter.
"PAYMENT DEFAULT" shall mean any non-payment of Basic Rent, Foundation Basic
Rent, Foundation Supplemental Rent or Supplemental Rent when due.
"PAYMENT INSTRUCTION" shall mean any Payment Instruction in the form of Schedule
C to the Payment Undertaking Agreement and shall include the Acknowledgment of
the Bank attached to the Payment Undertaking Agreement.
"PAYMENT UNDERTAKING AGREEMENT" shall mean the Payment Undertaking Agreement,
dated as of February 29, 1996, in substantially the form of Exhibit Q to the
Participation Agreement, between Old Dominion and the Bank.
"PAYMENT UNDERTAKING COLLATERAL" shall have the meaning specified in the
Granting Clause of the Loan Agreement.
"PAYMENT UNDERTAKING PAYMENT AMOUNT" shall mean in relation to a Payment
Undertaking Payment Date, the amount determined in accordance with Section 3.1
of the Payment Undertaking Agreement with respect to such Payment Undertaking
Payment Date.
24
"PAYMENT UNDERTAKING PAYMENT DATE" shall mean, with respect to any Payment
Undertaking Payment Amount, any date listed on Schedule A of the Payment
Undertaking Agreement and with respect to any Early Termination Amount, any date
listed on Schedule B of the Payment Undertaking Agreement.
"PAYMENT UNDERTAKING PLEDGE AGREEMENT" shall mean the Payment Undertaking Pledge
Agreement, dated as of February 29, 1996, in substantially the form of Exhibit R
to the Participation Agreement, between the Payment Undertaking Pledgee and the
Payment Undertaking Pledgor.
"PAYMENT UNDERTAKING PLEDGEE" shall mean the Owner Trustee, as pledgee under the
Payment Undertaking Pledge Agreement.
"PAYMENT UNDERTAKING PLEDGOR" shall mean Old Dominion, as pledgor under the
Payment Undertaking Pledge Agreement.
"PERMITTED ENCUMBRANCES" shall mean "Permitted Encumbrances" as defined in the
Old Dominion Indenture.
"PERMITTED INVESTMENTS" shall mean investments in (a) overnight loans to or
other customary overnight investments in commercial banks of the type referred
to in paragraph (d) below, (b) obligations of, or guaranteed as to interest and
principal by, the United States maturing within one year after such investment,
(c) open market commercial paper of any corporation incorporated under the laws
of the United States or any State thereof which is rated not less than "prime-1"
or its equivalent by Moody's and "A-1" or its equivalent by S&P maturing within
one year after such investment, and (d) certificates of deposit maturing within
one year after such investment and issued by commercial banks organized under
the laws of the United States or any State thereof or a domestic branch of a
foreign bank (i) having a combined capital and surplus in excess of $500,000,000
and (ii) which are rated "AA" (or "Aa") or better by S&P and/or Moody's;
PROVIDED that no more than $20,000,000 may be invested in such deposits at any
one such bank.
"PERMITTED LIENS" shall mean (i) the interests of Old Dominion and the Owner
Trustee under any of the Operative Documents; (ii) the Lien of the Old Dominion
Indenture; (iii) all Permitted Encumbrances; (iv) the interest of the Co-Owners;
(v) the terms and conditions of the Clover Agreements; (vi) all Lessor's Liens
and Owner Participant's Liens; (vii) the Liens of the Loan Agreement and the
Leasehold Mortgage; (viii) the interest of the holder of legal title as
contemplated by Section 11 of the Participation Agreement; (ix) the Pollution
Control Assets Lease; (x) the interests of Unit 2 Parties; and (xi) the Lien of
the Conveyance and Security Agreement, dated as of December 15, 1994, between
the Pollution Control Assets Lessor and Old Dominion.
"PERMITTED POST-TERM ENCUMBRANCES" shall mean these encumbrances specified in
clauses (6), (7), (8), (13), (14), (15), and (19) of the definition of
"Permitted Encumbrances" in the Old Dominion Indenture on the Closing Date.
25
"PERSON" shall mean any individual, corporation, cooperative, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLAN" shall mean any "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is subject to ERISA, any "plan" (as defined in Section 4975(e)(1) of
the Code) that is subject to Section 4975 of the Code, any trust created under
any such plan or any "governmental plan" (as defined in Section 3(32) of ERISA
or Section 414(d) of the Code) that is organized in a jurisdiction having
prohibitions on transactions with government plans similar to those contained in
Section 406 of ERISA or Section 4975 of the Code.
"PLANT OPERATOR" shall mean Virginia Power as operator of the Clover Power
Station pursuant to the Clover Agreements and any successor thereto.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as of February 29,
1996, in substantially the form of Exhibit J to the Participation Agreement,
between Old Dominion, as pledgor, and the Owner Trustee, as pledgee.
"PLEDGED COLLATERAL" shall have the meaning set forth in Section 2 of the
Deposit Pledge Agreement.
"PLEDGEE" shall mean the Owner Trustee, as pledgee under the Deposit Pledge
Agreement and under the Pledge Agreement, together with its successors and
permitted assigns.
"PLEDGOR" shall mean Old Dominion, as pledgor under the Deposit Pledge Agreement
and the Pledge Agreement, together with its successors and permitted assigns.
"POLLUTION CONTROL ASSETS" shall mean assets constituting Unit 1 Equipment and
Common Facility Equipment which were leased to the Pollution Control Assets
Lessor under the Pollution Control Assets Lease. The Pollution Control Assets
are those assets listed on Exhibit A-4 to the Equipment Head Lease and Exhibit
A-4 to the Equipment Operating Lease.
"POLLUTION CONTROL ASSETS LEASE" shall mean the Lease Agreement, dated as of
December 15, 1994, between the Pollution Control Assets Lessor and Old Dominion,
as amended from time to time, including, without limitation, as amended by the
Assignment, Assumption and Release Agreement, dated as of February 29, 1995,
among Esbelto B.V., Green Assets B.V. and Old Dominion.
"POLLUTION CONTROL ASSETS LESSOR" shall mean Green Assets B.V., a limited
liability company organized under the laws of The Netherlands, as lessor under
the Pollution Control Assets Lease, together with its successors and permitted
assigns.
"POWER PURCHASER" shall mean a Person becoming a purchaser of power under a
Power Sales Agreement pursuant to Section 15.3 of the Equipment Operating Lease.
26
"POWER SALES AGREEMENT" shall mean a wholesale power purchase agreement
substantially in the form of Exhibit B to the Equipment Operating Lease.
"PROPERTY" shall have the meaning specified in the Leasehold Mortgage.
"PROPOSED TAX LAW CHANGE" shall mean any proposed amendment, modification,
addition or change in or to the provisions of, or the official interpretation
of, section 467 of the Code that is proposed through amendment to the Code or by
final or proposed regulation thereunder promulgated by the U.S. Treasury
Department on the Closing Date.
"PRUDENT UTILITY PRACTICES" shall have the meaning specified in, and as
interpreted for purposes of, Section 1.67 of the Clover Operating Agreement as
in effect on the Closing Date.
"PURCHASE OPTION" shall have the meaning specified in paragraph (a) of Section
15.1 of the Equipment Operating Lease.
"PURCHASE OPTION PRICE" shall mean $412,685,984.
"QUALIFYING LETTER OF CREDIT" shall mean an irrevocable transferable letter of
credit issued for the benefit of the Owner Participant by a Qualifying Letter of
Credit Bank securing Old Dominion's obligation to pay all amounts of Basic Rent,
Supplemental Rent, Foundation Basic Rent and Foundation Supplemental Rent,
having a stated expiration date of not earlier than one year after the date of
original issuance and a drawing amount, (a) as of the date of issuance of such
Qualifying Letter of Credit and (b) as of each annual anniversary of the date of
issuance of such Qualifying Letter of Credit, equal to the sum of:
(x) the highest Termination Value under the Equipment Operating Lease
in the twelve month period following such date of issuance or annual
anniversary, and
(y) the highest Termination Value under the Foundation Operating Lease
in the twelve month period following such date of issuance or annual
anniversary;
MINUS, the sum of:
(A) the Qualifying Security Value as of such date of issuance or annual
anniversary, and
(B) the outstanding principal amount of the Loan Certificates on the
date of such highest Termination Values.
"QUALIFYING LETTER OF CREDIT BANK" shall mean (i) Nationsbank, N.A., provided
its senior unsecured debt obligations are rated at least "A+" by S&P and at
least "A1" by Moody's, or (ii) a United States branch of any bank, the senior
unsecured debt obligations (or long-term deposits) of which are rated by at
least one Rating Agency and are rated at least "AA" (or the
27
equivalent thereof) by each Rating Agency providing a rating in respect of such
obligations (or deposits) as of the date of the issuance of a Qualifying Letter
of Credit.
"QUALIFYING SECURITY" shall mean:
(a) (i) a note, bond, certificate of deposit, guaranteed
investment contract or other unqualified obligation of a bank,
investment bank or Affiliates of either, insurance company, savings and
loan association, CFC or CoBank ACB, the senior unsecured debt
obligations of which (or long-term deposits of which) are rated by at
least one Rating Agency and are rated at least "AA-" (or the equivalent
thereof) by each Rating Agency providing a rating in respect of such
obligations (or deposits); or
(ii) securities which are rated by at least one
Rating Agency and are rated at least "AA-" (or the equivalent thereof)
by each Rating Agency providing a rating in respect of such obligations
(not including a rating reflecting that of any bond insurer); or
(iii) securities which are insured under a bond
insurance policy issued by a bond insurer whose claim paying ability
has been rated by at least one Rating Agency and has been rated "AAA"
(or the equivalent thereof) by each Rating Agency providing a rating in
respect of such claim paying ability; or
(iv) a Qualifying Letter of Credit; or
(v) a combination of the obligations set forth
in clauses (i), (ii), (iii) and (iv);
(b) securities which are pledged by Old Dominion to the Owner
Trustee under the Pledge Agreement as security for Old Dominion's
obligations under the Equipment Operating Lease to pay all amounts of
Basic Rent, Termination Value and amounts sized by reference to
Termination Value thereunder; and
(c) securities which provide for the payment of interest and
principal or provide for redemption at the option of the holders
thereof, at such times and in such amounts as shall, on and after the
first anniversary of the Closing Date, be sufficient to pay all amounts
of (x) Basic Rent and Foundation Basic Rent in excess of principal and
interest due and payable on the Loan Certificates outstanding on each
Rent Payment Date and (y) the Purchase Option Price and the Foundation
Purchase Option Price in excess of the principal and interest due and
payable on the Loan Certificates outstanding on the Expiration Date.
"QUALIFYING SECURITY VALUE", with respect to any Qualifying Security, shall
mean, as of any date, the market value of the note, bond, certificate of
deposit, guaranteed investment contract or other unqualified obligation,
security, or insured Old Dominion Bonds, or the maximum drawing amount in such
twelve month period under a letter of credit. The market value of any
28
note, bond, certificate of deposit, guaranteed investment contract or other
unqualified obligation, security or insured Old Dominion Bonds not publicly
traded as of any date of determination constituting a Qualifying Security shall
be computed by an investment banking firm appointed by the Owner Participant and
reasonably acceptable to Owner Participant.
"RATING AGENCIES" shall mean S&P and Moody's.
"REAL PROPERTY" shall mean the Unit 1 Site and the Common Facilities Site.
"REASONABLE BASIS" for a position shall exist if tax counsel may properly advise
reporting such position on a tax return in accordance with Formal Opinion 85-352
issued by the Standing Committee on Ethics and Professional Responsibility of
the American Bar Association (or any successor to such Opinion).
"REGULATORY EVENT OF LOSS" shall mean an Event of Loss of the type described in
clause (iv) of the definition thereof.
"RENEWAL GROUND LEASE TERM" shall have the meaning specified in Section 2.3 of
the Ground Lease and Sublease.
"RENT" shall mean all Basic Rent and all Supplemental Rent.
"RENT PAYMENT DATE" shall mean January 5, 1998, and each succeeding January 5
thereafter, to and including the Expiration Date.
"REPLACEMENT CLOSING DATE" shall have the meaning specified in paragraph (c) of
Section 10.3 of the Equipment Operating Lease.
"REPLACEMENT COMPONENT" shall have the meaning specified in Section 7.2 of the
Equipment Operating Lease or the Foundation Operating Lease, as the case may be.
"REQUIRED LENDERS" shall mean Lenders holding more than 50% of the aggregate
principal amount of outstanding Loan Certificates.
"REQUIRED MODIFICATION" shall have the meaning specified in Section 8.1 of the
Equipment Operating Lease or the Foundation Operating Lease, as the case may be.
"RESET RATE" shall have the meaning specified in Section 2.12 of the Loan
Agreement.
"RESPONSIBLE OFFICER" shall mean, with respect to any Person, its Chairman of
the Board, its President, any Senior Vice President, the Chief Financial
Officer, any Vice President, the Treasurer or any other management employee (a)
that has the power to take the action in question and has been authorized,
directly or indirectly, by the Board of Directors of such Person, (b) working
under the direct supervision of such Chairman of the Board, President, Senior
Vice President, Chief Financial Officer, Vice President or Treasurer and (c)
whose
29
responsibilities include the administration of the transactions and agreements
contemplated by the Operative Documents.
"RETAINED ASSETS" shall mean (i) all assets constituting the Xxxx 0 Equipment
which are not Pollution Control Assets and (ii) all assets constituting the
Common Facility Equipment which are not Pollution Control Assets. The Retained
Assets are those assets listed on Exhibit A-3 to the Equipment Head Lease and
Exhibit A-3 to the Equipment Operating Lease.
"RETURN OPTION" shall have the meaning specified in paragraph (c) of Section
15.1 of the Equipment Operating Lease.
"S&P" shall mean Standard & Poor's Rating Group, a division of XxXxxx-Xxxx, Inc.
or any successor thereto.
"SCHEDULED CLOSING DATE" shall mean February 29, 1996 and any date set for
Closing in a notice of postponement pursuant to Section 2.2(c) of the
Participation Agreement.
"SECOND SEVERANCE AGREEMENT" shall mean the Personal Property Agreement, dated
as of February 29, 1996, in substantially the form of Exhibit N to the
Participation Agreement, between Old Dominion and Virginia Power.
"SECURED CLAIMS" shall have the meaning specified in Section 3 of the Pledge
Agreement.
"SECURED DEPOSIT CLAIMS" shall have the meaning specified in Section 3 of the
Deposit Pledge Agreement.
"SECURED INDEBTEDNESS" shall have the meaning specified in the Granting Clause
of the Loan Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITY" shall have the same meaning as in Section 2(1) of the Securities Act.
"SECURITY AGREEMENTS" shall mean, collectively, the Deposit Pledge Agreement,
the Payment Undertaking Pledge Agreement and the Pledge Agreement.
"SERIES A LOAN CERTIFICATES" shall mean Series A Loan Certificates, dated the
Closing Date, in substantially the form of Exhibit A to the Loan Agreement, in
an initial principal amount equal to the Series A Loan Commitment, issued by the
Owner Trustee to the Lenders pursuant to the Loan Agreement.
"SERIES A LOAN COMMITMENT" shall mean $239,861,780.
"SERIES B LOAN CERTIFICATES" shall mean Series B Loan Certificates, dated the
Closing Date, in substantially the form of Exhibit B to the Loan Agreement, in
an initial principal amount
30
equal to the Series B Loan Commitment, issued by the Owner Trustee to the
Lenders pursuant to the Loan Agreement.
"SERIES B LOAN COMMITMENT" shall mean $26,654,309.
"SERIES 1996 LOAN CERTIFICATES" shall mean the Series A Loan Certificates and
the Series B Loan Certificates.
"SERVICE CONTRACT OPTION" shall have the meaning specified in paragraph (b) of
Section 15.1 of the Equipment Operating Lease.
"SEVERABLE MODIFICATION" shall mean any Modification that is readily removable
without causing material damage to Clover Unit 1.
"SEVERANCE AGREEMENTS" shall mean the First Severance Agreement and the Second
Severance Agreement.
"SIGNIFICANT DAMAGE EVENT" shall mean any event (a) which causes damage to
Clover Unit 1 for which Old Dominion's share under the Clover Operating
Agreement of the cost of repair which is not covered by the proceeds of property
damage insurance is reasonably estimated to exceed $10,000,000, or (b) which is
reasonably estimated to result in Clover Unit 1 being removed from commercial
operation for a period of 60 days or more; PROVIDED, HOWEVER, that, damage or
interruption of the type specified in clause (a) or (b) above shall not be a
Significant Damage Event if at the time such damage or interruption occurs, (i)
Old Dominion shall have wholesale power contracts with its cooperative members
providing for a formulary rate or such other rate mechanism which permits Old
Dominion to recover, to the extent not covered by insurance, Old Dominion's
share of the costs of repair of such damage to Clover Unit 1 and any additional
costs (less any savings in fuel or maintenance cost as a result of Clover Unit 1
not being operational) incurred by Old Dominion in connection with the purchase
of replacement power during any such interruption in commercial operation of
Clover Unit 1, (ii) such formulary rate or such rate mechanism has been filed
with or approved by the appropriate regulatory authorities having jurisdiction
over the rates charged to member cooperatives by Old Dominion if and to the
extent such filing or approval is required by Applicable Law and (iii) is
supplying energy to its member cooperatives in accordance with such wholesale
power contracts.
"SPECIFIED SUM" shall mean $239,861,780, the amount paid by Old Dominion to the
Bank in consideration of the obligations of the Bank under the Payment
Undertaking Agreement.
"SUBSIDIARY" of any Person shall mean any corporation, association, or other
business entity of which more than 50% (by number of votes) of the voting stock
at the time outstanding shall at the time be owned, directly or indirectly, by
such Person or by any other corporation, association or trust which is itself a
Subsidiary within the meaning of this definition, or collectively by such Person
and any one or more such Subsidiaries.
31
"SUPPLEMENTAL FINANCING" shall have the meaning specified in Section 10.1 of the
Participation Agreement.
"SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and obligations
(other than Basic Rent) which Old Dominion assumes or agrees to pay under the
Operative Documents (other than the Foundation Operating Lease) to the Owner
Trustee or any other Person, including, but not limited to, Termination Value
and if and to the extent applicable, the Purchase Option Price or the Walk Away
Payment.
"TAX" or "TAXES" shall mean all sales taxes, use taxes, transfer taxes,
value-added taxes, ad valorem taxes, property taxes (personal and real, tangible
and intangible), income taxes, gross receipts taxes, withholding taxes and stamp
taxes, levies, assessments, withholdings and other charges and impositions of
any nature, plus all related penalties, fines and additions to tax, imposed by
any federal, state or local government or other taxing authority.
"TAX ADVANCE" shall have the meaning specified in Section 8.2(g) of the
Participation Agreement.
"TAX ASSUMPTIONS" shall have the meaning specified in Section 2 of the Tax
Indemnity Agreement.
"TAX BENEFIT" shall have the meaning specified in Section 8.2(e) of the
Participation Agreement.
"TAX CHANGE" shall have the meaning specified in Section 4(e) of the Tax
Indemnity Agreement.
"TAX CLAIM" shall have the meaning specified in Section 8.2(g) of the
Participation Agreement.
"TAX INDEMNITEE" shall have the meaning specified in Section 8.2(a) of the
Participation Agreement.
"TAX INDEMNITY AGREEMENT" shall mean the Tax Indemnity Agreement, dated as of
February 29, 1996, in substantially the form of Exhibit M to the Participation
Agreement, between Old Dominion and the Owner Participant.
"TERM", with respect to the Equipment Operating Lease and the Foundation
Operating Lease, shall mean the Interim Term and the Basic Term.
"TERMINATION DATE" shall mean each of the monthly dates during the Term
identified as a "Termination Date" on Schedule 2 of the Equipment Operating
Lease or Schedule 2 of the Foundation Operating Lease, as the case may be.
"TERMINATION VALUE" for any Termination Date shall mean (a) with respect to the
Equipment Interest, the product of the Equipment Interest Cost and the
appropriate percentage as determined in accordance with Schedule 2 of the
Equipment Operating Lease and (b) with respect to the
32
Foundation Interest, the product of the Foundation Interest Cost and the
appropriate percentage as determined in accordance with Schedule 2 of the
Foundation Operating Lease.
"TRANSACTION COSTS" shall mean the following:
(i) the cost of reproducing and printing the Operative
Documents and all costs and fees in connection with the initial filing
and recording of the Foundation Head Lease, the Foundation Operating
Lease, the Option Agreement and the Leasehold Mortgage and any other
document required to be filed or recorded pursuant to the provisions
hereof or of any other Operative Document and any Uniform Commercial
Code filing fees in respect of the perfection of any security interests
created by any of the Operative Documents or as otherwise reasonably
required by the Owner Participant;
(ii) the reasonable fees and expenses of Xxxxxxxxxx & Xxxxx
LLP, special counsel for the Owner Participant (up to the amount
separately agreed to by the Owner Participant and Old Dominion) and of
Xxxx & Valentine, special Virginia counsel to the Owner Participant,
for their services rendered in connection with the negotiation,
execution and delivery of the Operative Documents;
(iii) the reasonable fees and expenses of Xxxxxx, Xxxxxxxxxx &
Sutcliffe, special counsel for Old Dominion (up to the amount
separately agreed to by Old Dominion), for their services rendered in
connection with the negotiation, execution and delivery of the
Participation Agreement and the other Operative Documents;
(iv) the reasonable fees and expenses of XxXxxxx Xxxx, general
Virginia counsel for Old Dominion (up to the amount separately agreed
to by Old Dominion), for their services rendered in connection with the
negotiation, execution and delivery of the Participation Agreement and
the other Operative Documents;
(v) the reasonable fees and expenses of Day, Xxxxx & Xxxxxx,
special counsel for the Owner Trustee (up to the amount separately
agreed to by the Owner Trustee and Old Dominion), for their services
rendered in connection with the negotiation, execution and delivery of
the Participation Agreement and the other Operative Documents;
(vi) the reasonable fees and expenses of Xxxxx Xxxx &
Xxxxxxxx, special counsel for the Agent and the Lenders (up to the
amount separately agreed to by the Agent and Old Dominion), for their
services rendered in connection with the negotiation, execution and
delivery of the Participation Agreement and the other Operative
Documents;
(vii) the reasonable fees and expenses of Williams, Mullen,
Christian & Xxxxxxx, special counsel to the Owner Trustee, for their
services rendered in connection with the negotiation, execution and
delivery of the Participation Agreement and the other Operative
Documents to which it is a party;
33
(viii) the initial fees and expenses of the Owner Trustee in
connection with the execution and delivery of the Participation
Agreement and the other Operative Documents to which it is or will be a
party;
(ix) the fees of the Engineer (up to the amount separately
agreed to by the Engineer and Old Dominion), for its services rendered
in connection with delivering the Engineering Report required by
Section 4.14 of the Participation Agreement;
(x) the fees of the Appraiser (up to the amount separately
agreed to by the Appraiser and Old Dominion), for its services rendered
in connection with delivering the Appraisal required by Section 4.16 of
the Participation Agreement;
(xi) the fee of the Advisor to the Lessee (up to the amount
separately agreed to by BOT and Old Dominion), for its services
rendered in connection with the transactions contemplated by the
Participation Agreement;
(xii) the premium for the bond insurance issued by AMBAC;
(xiii) travel expenses incurred by the Owner Participant and
the Owner Trustee in connection with the transactions contemplated by
the Participation Agreement; and
(xiv) the facility fee payable to First Union Leasing
Corporation (in the amount agreed to by said Corporation and Old
Dominion).
Notwithstanding the foregoing, Transaction Costs shall not include internal
costs and expenses such as salaries and overhead of whatsoever kind or nature
nor costs incurred by the parties to the Participation Agreement pursuant to
arrangements with third parties for services (other than those expressly
referred to above or listed on Schedule 1 to the Participation Agreement), such
as computer time procurement, financial analysis and consulting, advisory
services, and costs of a similar nature.
"TRANSACTION PARTY" shall mean, individually or collectively as the context
shall require, all or any of the parties to the Operative Documents (including
the Trust Company).
"TRANSFEREE" shall have the meaning specified in Section 5.1(a) of the
Participation Agreement.
"TRANSFEREE GUARANTY" shall mean a guaranty of the obligations of a Transferee
executed pursuant to Section 5.1 of, and in substantially the form of Exhibit P
to, the Participation Agreement.
"TRANSFEREE'S GUARANTOR" shall mean any Person which shall guaranty the
obligations of a Transferee under the Operative Documents in accordance with
Section 5.1 of the Participation Agreement.
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"TRANSMISSION AND INTERCONNECTION AGREEMENT" shall mean a transmission and
interconnection agreement to be entered into by the Owner Trustee and Old
Dominion in connection with Old Dominion's exercise of the Service Contract
Option under the Equipment Operating Lease;
"TREASURY REGULATIONS" shall mean regulations, including temporary regulations,
promulgated under the Code.
"TRUST AGREEMENT" shall mean the Trust Agreement, dated as of February 29, 1996,
substantially in the form of Exhibit A to the Participation Agreement, between
the Owner Participant and the Owner Trustee in its individual capacity to the
extent expressly stated therein and otherwise not in its individual capacity but
solely as trustee thereunder.
"TRUST COMPANY" shall mean State Street Bank and Trust Company, a
state-chartered trust company organized and existing under the laws of the
Commonwealth of Massachusetts.
"TRUST ESTATE" shall mean all the estate, right, title and interest of the Owner
Trustee in, to and under the Lessor's Unit 1 Interest and the Operative
Documents, including, without limitation, all funds advanced to the Owner
Trustee by the Owner Participant, all installments and other payments of Basic
Rent, Foundation Basic Rent, Supplemental Rent, Foundation Supplemental Rent,
Termination Value under the Equipment Operating Lease and the Foundation
Operating Lease, condemnation awards, purchase price, sale proceeds, and all
other proceeds of any kind for or with respect to the Lessor's Unit 1 Interest
and the Operative Documents, but shall not include Excluded Property.
"TRUSTEES" shall mean Xxxxx X. Xxxx and C. Xxxxxxxxxx Xxxxxxxx as trustees under
the Leasehold Mortgage, and their successors and persons or entities substituted
for them.
"UNIT 1 EQUIPMENT" shall mean those assets listed on Exhibit A-1 to the
Equipment Head Lease and Exhibit A-1 to the Equipment Operating Lease. The Unit
1 Equipment includes Retained Assets and Pollution Control Assets which are
located on the Unit 1 Site, but does not include the Common Facilities
Equipment, the Xxxx 0 Foundation, the Common Facilities Foundation or the Clover
Real Estate.
"UNIT 1 FOUNDATION" shall mean all foundations, supports, structures and other
improvements situated on the Unit 1 Site, including those upon which the Unit 1
Equipment is situated.
"UNIT 1 SITE" shall mean the land on which the Clover Unit 1 Generating Facility
is situated, which land is described in Schedule 2 to Exhibit A to the Option
Agreement.
"UNIT 2 EQUIPMENT" shall mean those assets used in connection with Clover Unit
2, but does not include the Common Facilities Equipment, the Xxxx 0 Foundation,
the Common Facilities Foundation or the Clover Real Estate.
"UNIT 2 FOUNDATION" shall mean all foundations, supports, structures and other
improvements situated on the Unit 2 Site, including those upon which the Unit 2
Equipment is situated.
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"UNIT 2 PARTIES" shall mean at any time all of the parties (other than Virginia
Power or any successor thereto) which are then tenants or grantees of all or any
portion of interest in Clover Unit 2.
"UNIT 2 SITE" shall mean the land on which the Clover Unit 2 Generating Facility
is situated, which land is described in Schedule 3 to Exhibit A to the Option
Agreement.
"UNITED STATES" shall mean the United States of America.
"UTRECHT-AMERICA" shall mean Utrecht-America Finance Co., a corporation
organized and existing under the laws of the State of Delaware and any successor
thereto.
"VIRGINIA COMMISSION" shall mean the State Corporation Commission of Virginia,
including any successor governmental agency.
"VIRGINIA COMMISSION ORDER" shall mean the order issued by the Virginia
Commission with respect to the Overall Transaction (Case No. PUA950049) on
December 5, 1995.
"VIRGINIA POWER" shall mean Virginia Electric and Power Company, a corporation
organized under the laws of the Commonwealth of Virginia and any successor
thereto.
"WALK AWAY PAYMENT" shall mean an amount equal to the excess (if any) of
Termination Value with respect to the Equipment Interest over the Fair Market
Sales Value of the Equipment Interest both determined as of the Expiration Date
(minus a reasonable allowance for hypothetical disposition costs), such excess
not to exceed such Termination Value minus 20% of the Equipment Interest Cost;
PROVIDED that under all circumstances the Walk Away Payment when combined with
the Foundation Walk Away Payment, the Basic Rent and Foundation Basic Rent
payable on the Expiration Date, shall be at least equal to the outstanding
principal amount of and accrued interest on the Loan Certificates on the
Expiration Date.
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