Exhibit C(21)
================================================================================
LOAN AGREEMENT
BETWEEN
CITY OF FORSYTH, MONTANA
AND
PORTLAND GENERAL ELECTRIC COMPANY
$97,800,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(PORTLAND GENERAL ELECTRIC COMPANY PROJECT)
SERIES 1998A
DATED AS OF MAY 1, 1998
================================================================================
The amounts payable to the Issuer and certain other rights of the
Issuer under this Loan Agreement (except for amounts payable to, and certain
rights of, the Issuer under Section 4.04, Section 4.06(a), Section 5.03, Section
5.06, Section 5.07, Section 5.08 and Section 7.05 hereof and any rights of the
Issuer to receive notices, certificates, requests, requisitions, directions and
other communications hereunder) have been pledged and assigned to Chase
Manhattan Bank and Trust Company, National Association, as Trustee under the
Trust Indenture, dated as of May 1, 1998, from the Issuer. For the purpose of
perfecting the security interest of such Trustee in such amounts payable and
such rights assigned to such Trustee under the Montana Uniform Commercial
Code-Secured Transactions, the counterpart of this Loan Agreement pledged,
delivered and assigned to the Trustee shall be deemed the original thereof.
TABLE OF CONTENTS
SECTION PAGE
RECITALS.......................................................................1
ARTICLE I DEFINITIONS..................................................2
ARTICLE II REPRESENTATIONS, WARRANTIES AND AGREEMENTS...................2
Section 2.01. Representations, Warranties and Agreements of Issuer......2
Section 2.02. Representations, Warranties and Agreements of Company.....4
ARTICLE III ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF
PROCEEDS OF THE BONDS; THE PROJECTS..........................7
Section 3.01. Issuance of Bonds.........................................7
Section 3.02. Issuance of Other Obligations.............................7
Section 3.03. The Loan; Disposition of Bond Proceeds and Certain
Other Moneys............................................7
Section 3.04. Changes to Projects.......................................7
ARTICLE IV LOAN PAYMENTS; PAYMENTS TO REMARKETING AGENT
AND TRUSTEE; OTHER OBLIGATIONS...............................8
Section 4.01. Loan Payments.............................................8
Section 4.02. Payments of Purchase Price................................8
Section 4.03. Payments Assigned; Obligation Absolute....................8
Section 4.04. Payment of Expenses.......................................9
Section 4.05. Indemnification...........................................9
Section 4.06. Payment of Taxes and Charges in Lieu Thereof.............10
Section 4.07. Credit Facility..........................................10
Section 4.08. Compliance with Prior Agreements.........................12
ARTICLE V SPECIAL COVENANTS...........................................12
Section 5.01. Maintenance of Existence; Conditions Under Which
Exceptions Permitted.....................................12
Section 5.02. Permits or Licenses......................................12
Section 5.03. Arbitrage Covenant.......................................13
Section 5.04. Financing Statements.....................................13
Section 5.05. Covenants with Respect to Tax-Exempt Status of the Bonds.13
Section 5.06. Indemnification of Issuer................................13
Section 5.07. Records of Company; Maintenance and Operation of the
Projects...............................................14
-i-
SECTION PAGE
Section 5.08. Right of Access to the Projects..........................15
Section 5.09. Remarketing Agent........................................15
ARTICLE VI ASSIGNMENT..................................................15
Section 6.01. Conditions...............................................15
Section 6.02. Documents Furnished to Trustee...........................16
Section 6.03. Limitation...............................................16
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES..............................16
Section 7.01. Events of Default........................................16
Section 7.02. Force Majeure............................................17
Section 7.03. Remedies.................................................18
Section 7.04. No Remedy Exclusive......................................18
Section 7.05. Reimbursement of Attorneys' Fees.........................18
Section 7.06. Waiver of Breach.........................................18
ARTICLE VIII PURCHASE OR REDEMPTION OF BONDS.............................19
Section 8.01. Redemption of Bonds......................................19
Section 8.02. Purchase of Bonds........................................19
Section 8.03. Obligation to Prepay.....................................19
Section 8.04. Compliance with Indenture................................20
ARTICLE IX MISCELLANEOUS...............................................20
Section 9.01. Term of Agreement........................................20
Section 9.02. Notices..................................................21
Section 9.03. Parties in Interest......................................21
Section 9.04. Amendments...............................................21
Section 9.05. Counterparts.............................................21
Section 9.06. Severability.............................................21
Section 9.07. Governing Law............................................21
EXHIBIT A -- Description of the Projects
-ii-
LOAN AGREEMENT
This LOAN AGREEMENT, dated as of May 1, 1998, is between the CITY OF
FORSYTH, MONTANA, a political subdivision duly organized and existing under the
Constitution and laws of the State (the "Issuer"), and PORTLAND GENERAL ELECTRIC
COMPANY, a corporation duly organized under the laws of the State of Oregon and
duly qualified to conduct business in the State (the "Company").
RECITALS:
A. The Issuer is authorized by the provisions of the Act to issue one or
more series of its revenue bonds to finance all or part of the cost of projects
consisting of exempt facilities (as such term is used in the Code) located
within the territorial limits of the Issuer.
B. The Act provides that payment of the principal of and interest on
revenue bonds issued thereunder shall be secured by a pledge of the revenues out
of which such revenue bonds shall be payable and may be secured by a pledge of
an agreement relating to a project.
C. The Issuer has previously issued the Prior Bonds on behalf of the
Company for the purpose of refinancing a portion of the costs of acquiring and
improving the Project.
D. The Issuer is authorized by the Act to issue its revenue refunding bonds
to refund the Prior Bonds.
E. By proper action of its governing body taken pursuant to and in
accordance with the provisions of the Act, the Issuer has authorized and
undertaken to issue its Pollution Control Revenue Refunding Bonds (Portland
General Electric Company Project) Series 1998A and the issuance of the Bonds to
refund the Prior Bonds is authorized by the provisions of the Act.
F. The issuance of the Bonds to refund the Prior Bonds will provide
financing on more advantageous terms for the cost of the Projects financed by
the Prior Bonds.
G. The Bonds shall be issued under and pursuant to the Trust Indenture,
dated as of May 1, 1998, between the Issuer and Chase Manhattan Bank and Trust
Company, National Association, as Trustee, pursuant to which the Issuer shall
pledge and assign to the Trustee certain rights of the Issuer hereunder.
H. Pursuant to this Agreement, the Issuer will loan the proceeds of the
Bonds to the Company to provide financing for the Projects, and the Company
agrees to make, or cause to be made, payments sufficient to pay when due
(whether at stated maturity, by acceleration or otherwise) the principal of and
premium, if any, and interest on the Bonds.
I. The Company agrees under this Agreement to pay, or cause to be paid,
when due, the purchase price of Bonds purchased pursuant to the terms of the
Indenture.
J. The issuance, sale and delivery of the Bonds and the execution and
delivery of this Agreement and the Indenture have been in all respects duly and
validly authorized in accordance with the Act and the Bond Resolution.
In consideration of the respective representations and agreements contained
in this Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All words and terms used but not otherwise defined in this Agreement, shall
for all purposes of this Agreement have the meanings specified in Article I of
the Indenture, unless the context clearly requires otherwise. In addition, the
following words and terms shall have the following meanings when used in this
Agreement:
"Affiliate" means any entity controlling, controlled by or under common
control with the Company.
"Indenture" means the Trust Indenture, dated as of May 1, 1998, between the
Issuer and the Trustee, relating to the issuance of the Bonds as such Trust
Indenture may be supplemented and amended from time to time as therein
permitted.
The words "hereto," "hereunder" and other words of similar import refer to
this Agreement as a whole.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 2.01. Representations, Warranties and Agreements of Issuer. The
Issuer represents, warrants and agrees that:
(a) The Issuer is a political subdivision of the State, duly organized
and validly existing under the Constitution and laws of the State.
-2-
(b) Under the Act, the Issuer has the power to enter into the
transactions contemplated by this Agreement and the Indenture and to carry
out its obligations hereunder and thereunder, including the issuance and
sale of the Bonds. By proper action of its governing body, the Issuer has
been duly authorized to execute, deliver and duly perform this Agreement
and the Indenture and to issue and sell the Bonds and has made all
determinations and findings as and where required by Section 90-5-106 of
the Act.
(c) The aggregate principal amount of the Bonds authorized to be
issued under the Indenture for the purpose of refunding the Prior Bonds
does not exceed the aggregate principal amount of the Prior Bonds now
outstanding.
(d) The Prior Agreements and the Prior Indentures are each in full
force and effect and have not been amended or supplemented.
(e) The proceeds of the sale of the Bonds (i) will be deposited with
the Prior Trustees for deposit into the Prior Bond Funds to provide a
portion of the moneys necessary for the Refunding and (ii) will be applied
by the Prior Trustees to redeem the Prior Bonds pursuant to the Prior
Indentures on the Redemption Date. The Prior Bonds are now outstanding in
the principal amount of $97,800,000. Prior to the issuance and delivery of
the Bonds, the Prior Trustees will be given irrevocable instructions and
will be directed to call all of the Prior Bonds for redemption on the
Redemption Date.
(f) The Bonds are to be issued under and secured by the Indenture,
pursuant to which certain of the Issuer's right, title and interest in this
Agreement and the revenues derived by the Issuer pursuant to this Agreement
will be pledged and assigned to the Trustee as security for payment of the
principal and purchase price of, premium, if any, and interest on the
Bonds.
(g) Neither the execution and delivery of this Agreement or the
Indenture, the issuance and sale of the Bonds, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, the Tax
Certificate, the Indenture or the Bonds conflicts with or results in a
breach of the terms, conditions or provisions of any restriction or any
agreement or instrument to which the Issuer is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(h) The Issuer has not assigned or pledged and will not assign or
pledge its interest in this Agreement other than to secure the Bonds.
(i) To the knowledge of the Issuer, after due inquiry, no litigation
is pending or threatened against the Issuer to restrain or enjoin the
issuance or sale of the Bonds or in any way affecting any authority for or
the validity of the Bonds, the Indenture, this Agreement or the existence
or powers of the Issuer or the right of the Issuer under the Act to
refinance a portion of the costs of the Projects through the issuance of
the Bonds.
-3-
(j) To the knowledge of the Issuer, after due inquiry, no event has
occurred and no condition exists which, upon the issuance of the Bonds,
would constitute an event of default on the part of the Issuer under the
Prior Indenture.
(k) The Issuer will not knowingly take or omit to take any action
reasonably within its control the taking or omission of which would
adversely affect the Tax-Exempt status of the Bonds. The Issuer will file
or cause to be filed with the United States Department of Treasury the
information required by Section 149(e) of the Code.
(l) A public hearing relating to the Refunding for the Projects was
held on May 4, 1998, following public notice thereof, pursuant to Section
147(f) of the Code, and the public hearing and approval requirements of
Section 147(f) of the Code have been satisfied.
(m) Within the meaning of Sections 2-2-121 and 2-2-125, Montana Code
Annotated, as amended, no "public officer," "public employee," "officer" or
"employee" of the Issuer is engaged as counsel, consultant, representative,
or agents of the Company, or has a substantial financial interest in the
Company. None of the officers, deputies, or employees of the Issuer or
employees having terminated their employment with the Issuer within the six
months immediately preceding this Agreement are "interested in" this
Agreement, the Indenture, the Bonds or the transactions contemplated
thereby, within the meaning of Section 2-2-201, Montana Code Annotated, as
amended.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Issuer shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
Section 2.02. Representations, Warranties and Agreements of Company. The
Company represents, warrants and agrees that:
(a) It is a corporation duly organized and validly existing under the
laws of the State of Oregon, is not in violation of any provision of its
Articles of Incorporation or its Bylaws, in each case as the same have been
amended, has full corporate power to own its properties and conduct its
business, has not received notice and has no reasonable grounds to believe
that it is in violation of any laws in any manner material to its
obligations under this Agreement, and has the corporate power to enter
into, and by proper corporate action has duly authorized the execution and
delivery of, this Agreement and the Tax Certificate.
(b) Neither the execution and delivery of this Agreement or the Tax
Certificate, the consummation of the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement or the Tax Certificate conflicts with or will result in a breach
of any of the terms, conditions or provisions of any law or judgment to
which the Company or its property or assets are subject or of any corporate
restriction contained in its Articles of Incorporation or its
-4-
Bylaws, in each case as the same have been amended, or any agreement or
instrument to which the Company is now a party or by which it is bound, or
constitutes, with or without the giving of notice or lapse of time or both,
a default under any of the foregoing, or results in the creation or
imposition of any lien, charge or encumbrance whatsoever upon any of the
property or assets of the Company under the terms of any instrument or
agreement.
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a legal, valid and binding obligation of
the Company, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, usury or other similar laws affecting the rights of creditors
generally, equitable principles relating to the availability of remedies
and principles of public or governmental policy limiting the enforceability
of the indemnification and contribution provisions.
(d) Other than the orders of the Public Utility Commission of Oregon
and the approval by the Issuer, all of which orders and approvals will have
been received and be in effect prior to the initial authentication and
delivery of the Bonds, no consent, approval, authorization or order of, or
registration with, any court or governmental or regulatory agency or body
is required with respect to the Company for the execution, delivery and
performance by the Company of this Agreement and the Tax Certificate.
(e) The Company has received an executed counterpart of the Indenture
and hereby consents to and approves of the provisions thereof.
(f) The information relating to the Projects furnished by the Company
in writing to Xxxxxxx and Xxxxxx, as Bond Counsel, in connection with the
issuance by the Issuer of the Bonds, is, to the best of the Company's
knowledge, true and correct.
(g) The Prior Agreements and the Prior Indentures are in full force
and effect and have not been amended or supplemented.
(h) No event has occurred and is continuing under the provisions of
the Prior Indentures that now constitutes, or with the lapse of time or the
giving of notice, or both, would constitute, an event of default under the
Prior Indentures.
(i) Upon the initial authentication and delivery of the Bonds, the
Company has given or will give timely notice as required by the provisions
of the Prior Agreements of the Company's intent to prepay the amounts
payable thereunder to provide for the redemption of the Prior Bonds on the
Redemption Date.
(j) The aggregate principal amount of Bonds authorized to be issued
under the Indenture does not exceed the aggregate principal amount of the
Prior Bonds now Outstanding.
-5-
(k) The Company does not, as of the date of issuance of the Bonds,
reasonably expect any use of moneys derived from the proceeds of the Bonds
or any investment or reinvestment thereof or from the sale of the Projects
which would cause the Bonds to be classified as "arbitrage bonds" within
the meaning of Section 148 of the Code.
(l) All of the proceeds of the Prior Bonds, including the investment
earnings thereon, have been disbursed in accordance with the provisions of
the Prior Indentures and the Prior Agreements and there are no proceeds of
the Prior Bonds, or investment earnings therefrom, or any other moneys
being held by the Prior Trustee under the Prior Indentures other than
amounts held in the Interest Reserve Accounts in the Prior Bond Funds.
(m) The Pollution Control Facilities that comprise the Projects
constitute Exempt Facilities and consist of those facilities described in
Exhibit A hereto (as such Exhibit A is from time to time amended or
supplemented in accordance with Section 3.04 hereof), and the Company shall
not consent to any changes in the Projects which would adversely affect the
qualification of the Projects as a "project" under the Act or adversely
affect the Tax-Exempt status of the Bonds.
(n) Substantially all of the proceeds of the Prior Bonds have been
expended for the purpose of acquiring, constructing and improving the
Projects, which constitutes Exempt Facilities. None of the proceeds of the
Prior Bonds were used (i) to acquire land (or an interest therein) or (ii)
to acquire any property (or an interest therein) unless the first use of
such property was pursuant to such acquisition, all within the meaning of
Section 147 of the Code.
(o) The average maturity of the Bonds does not exceed 120% of the
average reasonably expected economic life of the Projects.
(p) All of the Prior Bonds will be redeemed within 90 days of the date
of the initial authentication and delivery of the Bonds, and all of the
proceeds of the sale of the Bonds will be spent within 90 days of the
initial authentication and delivery of the Bonds.
(q) The Projects (i) were designed to meet applicable federal, state
and local requirements for the control of pollution or the disposal of
solid waste, (ii) were to be used solely for purposes contemplated by the
Act, and (iii) are located within the boundaries of the Issuer.
(r) The representations, warranties and covenants of the Company set
forth in the Project Certificate are incorporated herein by reference and
are hereby made a part of this Agreement as if set forth herein.
(s) The Company will cooperate with the Issuer in filing or causing to
be filed with the United States Department of Treasury the information
required by Section 149(e) of the Code.
-6-
(t) The Company will pay the principal of and premium, if any, and
interest to the Redemption Date on all Prior Bonds that are validly
presented to the Company for payment after the Prior Trustee has paid to
the Company, in accordance with Section 315 of the Prior Indentures, any
moneys held in trust for the payment of the principal of and premium, if
any, and interest on the Prior Bonds.
Concurrently with the initial authentication and delivery of the Bonds
under the Indenture, the Company shall execute and deliver a certificate
reaffirming the foregoing representations, warranties and agreements as of the
date thereof.
ARTICLE III
ISSUANCE OF THE BONDS; THE LOAN; DISPOSITION OF
PROCEEDS OF THE BONDS; THE PROJECTS
Section 3.01. Issuance of Bonds. In order to refinance a portion of the
cost of the Projects by effecting the Refunding, the Issuer shall issue the
Bonds under and in accordance with the Act and pursuant to the Indenture. The
Company hereby approves the issuance of the Bonds and all terms and conditions
thereof.
Section 3.02. Issuance of Other Obligations. The Issuer and the Company
expressly reserve the right to enter into, to the extent permitted by law, an
agreement or agreements other than this Agreement with respect to the issuance
by the Issuer, under an indenture or indentures other than the Indenture, of
obligations to provide additional funds to pay costs of facilities in addition
to the Projects or to provide for the refunding of all or any principal amount
of the Bonds. Such obligations will not be entitled to the benefits of the
Indenture.
Section 3.03. The Loan; Disposition of Bond Proceeds and Certain Other
Moneys. (a) The Issuer shall lend to the Company the proceeds of the issuance
and sale of the Bonds for the purposes specified in Section 3.01 of this
Agreement. The Issuer and the Company shall, simultaneously with the delivery of
the Bonds, cause such proceeds, other than accrued interest, if any, to be
transferred to the Prior Trustees for deposit into the Prior Bond Funds to be
used to pay the principal amount of the Prior Bonds upon their redemption on the
Redemption Date.
(b) A portion of the moneys on deposit in the Interest Reserve Accounts
shall be applied and disbursed in accordance with the Indenture.
Section 3.04. Changes to Projects. The Company may supplement or amend the
plans and specifications relating to the Projects as duly certified by an
Authorized Company Representative (including additions thereto or omissions
therefrom), provided that no such supplement or amendment shall change the
description of the Projects set forth in Exhibit A to this Agreement or change
the function of any principal component of the Projects described in Exhibit A
to this Agreement unless, in either case, the Trustee and the Issuer first
receive an opinion of Bond Counsel to the effect that such change will not
adversely affect the Tax-
-0-
Xxxxxx status of any of the Bonds. If any such supplement or amendment affects
the description of the Projects, the Company and the Issuer will amend Exhibit A
to this Agreement to reflect such supplement or amendment, which supplement or
amendment will not be considered as an amendment to this Agreement requiring the
consent of any Owner or the Trustee for the purposes of Article XII of the
Indenture.
ARTICLE IV
LOAN PAYMENTS; PAYMENTS TO REMARKETING
AGENT AND TRUSTEE; OTHER OBLIGATIONS
Section 4.01. Loan Payments. (a) As and for repayment of the loan made to
the Company by the Issuer pursuant to Section 3.03 hereof, the Company shall pay
to the Trustee, for the account of the Issuer, an amount equal to the aggregate
principal amount of and the premium, if any, on the Bonds from time to time
Outstanding and, as interest on its obligation to pay such amount, an amount
equal to interest on the Bonds, such amounts to be paid in installments due on
the dates, in the amounts and in the manner provided in the Indenture for the
payment of the principal of and premium, if any, and interest on the Bonds,
whether at maturity, upon redemption, acceleration or otherwise; provided,
however, that the obligation of the Company to make any such payment hereunder
shall be reduced by the amount of any moneys held by the Trustee under the
Indenture and available for such payment.
(b) In the event the Company shall fail to make any payment required by
Section 4.01 (a) hereof with respect to the principal of and premium, if any,
and interest on any Bond the payment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company will pay interest on any overdue amount with respect to
principal of such Bond and, to the extent permitted by law, on any overdue
amount with respect to premium, if any, and interest on such Bond, at the
interest rate borne by such Bond until paid.
Section 4.02. Payments of Purchase Price. The Company shall pay or cause to
be paid for its account to the Trustee amounts equal to the amounts to be paid
by the Trustee as the purchase price for such Bonds pursuant to Section 3.01 and
Section 3.02 of the Indenture in respect of Outstanding Bonds, such amounts to
be paid to the Trustee on the dates such payments are to be made pursuant to
Section 3.01 and Section 3.02 of the Indenture; provided, however, that the
obligation of the Company to make any such payment hereunder shall be reduced by
the amount of any moneys held by the Trustee under the Indenture and available
for such payment.
Section 4.03. Payments Assigned; Obligation Absolute. It is understood and
agreed that the Loan Payments are pledged and assigned by the Issuer to the
Trustee pursuant to the Indenture, and that all right, title and interest of the
Issuer hereunder (except for amounts payable to, and the rights of, the Issuer
under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06, Section 5.07,
Section 5.08 and Section 7.05 hereof and the Issuer's rights to receive notices,
certificates, requests. requisitions, directions and other communications
-8-
hereunder) are pledged and assigned to the Trustee pursuant to the Indenture.
The Company assents to such pledge and assignment and agrees that the obligation
of the Company to make the Loan Payments and payments to the Trustee under
Section 4.02 hereof shall be absolute, irrevocable and unconditional and shall
not be subject to cancellation, termination or abatement, or to any defense
other than payment, or to any right of setoff, counterclaim or recoupment
arising out of any breach under this Agreement or the Indenture or otherwise by
the Company, the Trustee, the Remarketing Agent, or any other party, and,
further, that the Loan Payments and the other payments due hereunder shall
continue to be payable at the times and in the amounts herein and therein
specified whether or not the Projects, or any portion thereof, shall have been
destroyed by fire or other casualty, or title thereto, or the use thereof, shall
have been taken by the exercise of the power of eminent domain, and that there
shall be no abatement of or diminution in any such payments by reason thereof,
whether or not the Projects shall be used or useful and whether or not any
applicable laws, regulations or standards shall prevent or prohibit the use of
the Projects or for any other reason. The Projects shall not constitute any part
of the Trust Estate or any part of the security for the Bonds.
Section 4.04. Payment of Expenses. The Company shall pay all of the
Administration Expenses of the Issuer, the Trustee, the Paying Agent, the
Registrar, Xxxxx'x and S&P under the Indenture and of any Remarketing Agent
under a Remarketing Agreement directly to each such entity. The Company shall
also pay all of the expenses of the Prior Trustees in connection with the
Refunding and all other reasonable fees and expenses incurred in connection with
the issuance of the Bonds, including, but not limited to, all costs associated
with any discontinuance of the book-entry system described in Section 2.10 of
the Indenture.
Section 4.05. Indemnification. The Company releases the Trustee and the
Registrar and their respective officers, agents, servants and employees from,
agrees that the Trustee and the Registrar and their respective officers, agents,
servants and employees shall not be liable for, and agrees to indemnify and hold
free and harmless the Trustee and the Registrar and their respective officers,
agents, servants and employees from and against, any liability for any loss or
damage to property or any injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Projects, except in any
case as a result of the gross negligence or willful misconduct of the Trustee
and the Registrar and their respective officers, agents, servants and employees.
The Company will indemnify and hold free and harmless the Trustee and the
Registrar and their respective officers, agents, servants and employees from and
against any loss, claim, damage, tax, penalty, liability, disbursement,
litigation or other expenses, attorneys' fees and expenses or court costs
arising out of, or in any way relating to, the execution or performance of this
Agreement, the Tax Certificate, the issuance or sale of the Bonds, the
Refunding, the acceptance or administration of the trust under the Indenture or
any other cause whatsoever pertaining to this Agreement, the Tax Certificate or
the Indenture, except in any case as a result of the gross negligence or willful
misconduct of the Trustee and the Registrar or their respective officers,
agents, servants and employees.
The obligations of the Company under this Section 4.05 shall survive the
termination of this Agreement.
-9-
Section 4.06. Payment of Taxes and Charges in Lieu Thereof. (a) The Company
covenants and agrees that it will, from time to time for so long as the Company
has an ownership interest in the Projects, promptly pay and discharge or cause
to be paid and discharged when due its share of all taxes, assessments, levies,
duties, imposts and governmental, utility and other charges lawfully imposed
upon the Projects or any part thereof or upon income and profits thereof or any
payments hereunder. In the event that the Company sells or otherwise transfers
its interest in the Projects while the Bonds are Outstanding, the Company shall
require the purchasers or transferor of the Company's interest in the Project to
assume the Company's obligations under this Section 4.06(a).
(b) The Company shall pay or cause to be satisfied and discharged or make
adequate provision to satisfy and discharge (including the provisions of
adequate bonding therefor) within 60 days after the same shall accrue, any lien
or charge upon the Loan Payments or payments under Section 4.02 hereof, and all
lawful claims or demands for labor, materials, supplies or other charges which,
if unpaid, might be or become a lien thereon.
(c) Notwithstanding subsections (a) and (b) of this Section, the Company
may, at its expense and in its own name and behalf or in the name and behalf of
the Issuer, in good faith contest any such liens, taxes, assessments and other
charges and, in the event of any such contest, may permit such liens, taxes,
assessments or other charges so contested to remain unpaid during the period of
such contest and any appeal therefrom; provided further that during such period
enforcement of such contested item is effectively stayed, unless by nonpayment
of any such items the lien of the Indenture as to the amounts payable hereunder
will be materially endangered, in which event the Company shall promptly pay and
cause to be satisfied and discharged all such unpaid items. The Issuer will
cooperate fully with the Company in any such contest. In the event that the
Company shall fail to pay any of the foregoing items required by this Section to
be paid by the Company, the Issuer may (but shall be under no obligation to) pay
the same, and any amounts so advanced therefor by the Issuer shall become an
additional obligation of the Company to the Issuer. The Company agrees to repay
the amounts so advanced, from the date thereof, together (to the extent
permitted by law) with interest thereon until paid at a rate per annum which is
one percentage point greater than the highest rate per annum borne by any of the
Bonds.
Section 4.07. Credit Facility. (a) The Company may at any time provide for
a Change of Credit Facility, provided that the Company delivers to the Trustee
and the Remarketing Agent, not less than five Business Days prior to the date on
which the Trustee must notify the Owners of a Change of Credit Facility pursuant
to Section 2.11 of the Indenture and prior to the effective date of any such
Change of Credit Facility, the following:
(1) a notice which (A) states the effective date of the Change of
Credit Facility, (B) describes the terms of the Change of Credit Facility,
and (C) directs the Trustee to give notice pursuant to Section 2.11 (a) of
the Indenture;
-10-
(2) an opinion of Bond Counsel stating, in effect, that such Change of
Credit Facility (A) is authorized under this Agreement, and (B) will not
cause the interest on the Bonds to become includible in the gross income of
the Owners thereof for federal income tax purposes;
(3) a certificate of an Authorized Company Representative as to
whether the Bonds are then rated by either Xxxxx'x or S&P, or both; and
(4) written evidence from Xxxxx'x, if the Bonds are then rated by
Xxxxx'x, and from S&P, if the Bonds are then rated by S&P, in each case to
the effect that such rating agency has reviewed the proposed Change of
Credit Facility and that such Change of Credit Facility will not, by
itself, result in a reduction, suspension or withdrawal of its rating or
ratings of the Bonds.
(b) In lieu of satisfying the requirements of subsection (a) above, the
Company may provide for a Change of Credit Facility at any time that the Bonds
are subject to optional redemption pursuant to Section 4.02(b) of the Indenture,
provided that the Company delivers to the Trustee and the Remarketing Agent not
less than 30 days before the effective date of the Change of Credit Facility:
(1) a notice which (A) states the effective date of the Change of
Credit Facility, (B) describes the terms of the Change of Credit Facility,
(C) directs the Trustee to give notice pursuant to Section 2.11 of the
Indenture that the Bonds are subject to mandatory purchase, in whole, on or
before the effective date of the Change of Credit Facility in accordance
with Section 3.02(b)(ii) of the Indenture, and (D) directs the Trustee to
take any other action as shall be necessary for the Trustee to take to
effect the Change of the Credit Facility; and
(2) on or before the effective date of the Change of Credit Facility,
the Company shall furnish to the Trustee an opinion of Bond Counsel
satisfying the requirement of clause (2) of subsection (a) above.
(c) The Company may provide for one or more extensions of a Credit
Facility for any period commencing after its then-current expiration date
without complying with the foregoing provisions of this Section.
(d) The Company may rescind its election to make a Change of Credit
Facility at any time prior to the effective date thereof.
-11-
Section 4.08. Compliance with Prior Agreements. The Company hereby
confirms its obligations under the Prior Agreements to furnish any moneys
required to be deposited with the Prior Trustee under the Prior Indentures
in order to redeem the Prior Bonds on the Redemption Date, to the extent
that the proceeds of the Bonds on deposit in the Prior Bond Funds, together
with any investment earnings thereon, is less than the amount required to
pay the principal of and applicable redemption premium and interest on the
Prior Bonds upon their redemption on the Redemption Date, in accordance
with the terms and conditions of the Prior Indentures.
ARTICLE V
SPECIAL COVENANTS
Section 5.01. Maintenance of Existence; Conditions Under Which Exceptions
Permitted. The Company shall maintain in good standing its corporate existence
as a corporation organized under the laws of one of the states of the United
States or the District of Columbia and will remain duly qualified to do business
in the State for so long as the Company has an ownership interest in the
Projects, will not dissolve or otherwise dispose of all or substantially all of
its assets and will not consolidate with or merge into another corporation;
provided, however, that the Company may, without violating the foregoing,
undertake from time to time any one or more of the following, if, prior to the
effective date thereof, there shall have been delivered to the Trustee an
opinion of Bond Counsel stating that the contemplated action will not adversely
affect the Tax-Exempt status of the Bonds:
(a) consolidate or merge with another domestic corporation (i.e., a
corporation incorporated and existing under the laws of one of the states
of the United States or of the District of Columbia), or sell or otherwise
transfer to another entity all or substantially all of its assets as an
entirety, provided the resulting, surviving or transferee entity, as the
case may be, shall be (i) the Company or (ii) an entity qualified to do
business in the State as a foreign corporation or incorporated and existing
under the laws of the State, which, as a result of the transaction, shall
have assumed (either by operation of law or in writing) all of the
obligations of the Company hereunder; or
(b) convey all or substantially all of its assets to one or more
wholly-owned subsidiaries of the Company so long as the Company shall
remain in existence and primarily liable on all of its obligations
hereunder.
Section 5.02. Permits or Licenses. In the event that it may be necessary
for the proper performance of this Agreement on the part of the Company or the
Issuer that any application or applications for any permit or license to do or
to perform certain things be made to any governmental or other agency by the
Company or the Issuer, the Company and the Issuer each shall, upon the request
of either, execute such application or applications.
-12-
Section 5.03. Arbitrage Covenant. The Issuer, to the extent it has any
control over proceeds of the Bonds, and the Company covenant and represent to
each other and to and for the benefit of the Beneficial Owners that so long as
any of the Bonds remain Outstanding, moneys on deposit in any fund in connection
with the Bonds, whether such moneys were derived from the proceeds of the sale
of the Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Code and any lawful regulations promulgated thereunder, as the same exist on
this date or may from time to time hereafter be amended, supplemented or
revised. The Company also covenants for the benefit of the Beneficial Owners to
comply with all of the provisions of the Tax Certificate. The Company reserves
the right, however, to make any investment of such moneys permitted by State
law, if, when and to the extent that said Section 148 or regulations promulgated
thereunder shall be repealed or relaxed or shall be held void by final judgment
of a court of competent jurisdiction, but only upon receipt of a Favorable
Opinion of Bond Counsel with respect to such investment.
Section 5.04. Financing Statements. The Company shall, to the extent
required by law, file and record, refile and re-record, or cause to be fled and
recorded, refiled and re-recorded, all documents or notices, including the
financing statements and continuation statements, referred to in Section 5.05 of
the Indenture. The Issuer shall cooperate fully with the Company in taking any
such action. Concurrently with the execution and delivery of the Bonds, the
Company shall cause to be delivered to the Trustee the opinion of counsel
required pursuant to Section 5.05(a) of the Indenture.
Section 5.05. Covenants with Respect to Tax-Exempt Status of the Bonds. The
Company covenants for the benefit of the Owners of the Bonds and the Issuer that
it (a) has not taken, and will not take or permit to be taken on its behalf, any
action which would adversely affect the Tax-Exempt status of the Bonds and (b)
will take, or require to be taken, such actions as may, from time to time, be
required under applicable law or regulation to continue to cause the Bonds to be
Tax-Exempt.
Section 5.06. Indemnification of Issuer. (a) The Company agrees that the
Issuer, its elected or appointed officials, officers, agents, servants and
employees, shall not be liable for, and agrees that it will at all times
indemnify and hold free and harmless the Issuer, its elected or appointed
officials, officers, agents, servants and employees from and against, and pay
all expenses of the Issuer, its elected or appointed officials, officers,
agents, servants and employees relating to, (a) any lawsuit, proceeding or claim
arising in connection with the Projects or this Agreement that results from any
action taken by or on behalf of the Issuer, its elected or appointed officials,
officers, agents, servants and employees pursuant to or in accordance with this
Agreement or the Indenture that may be occasioned by any cause whatsoever,
except the gross negligence or willful misconduct of the Issuer, its elected or
appointed officials, officers, agents, servants or employees, or (b) any
liability for any loss or damage to property or any injury to or death of any
person that may be occasioned by any cause whatsoever pertaining to the
Projects, except the negligence or willful misconduct of the Issuer, its elected
or appointed officials, officers, agents, servants or employees. In case any
action shall be brought against the Issuer in respect of which indemnity may be
sought against the Company, the Issuer shall promptly notify the Company in
writing and the Company shall
-13-
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Issuer and the payment of all expenses. Failure by the
Issuer to notify the Company shall not relieve the Company from any liability
which it may have to the Issuer otherwise than under this Section 5.06. The
Issuer shall have the right to employ separate counsel in any such action and
participate in the defense thereof, such counsel shall be paid by the Issuer
unless the employment of such counsel has been authorized by the Company. The
Company shall not be liable for any settlement of any such action without its
consent, but if any such action is settled with the consent of the Company or if
there be final judgment for the plaintiff in any such action, the Company agrees
to indemnify and hold free and harmless the Issuer, its elected or appointed
officials, officers, agents, servants and employees from and against any loss or
liability by reason of such settlement or judgment. The Company will reimburse
the Issuer, its elected or appointed officials, officers, agents, servants and
employees for any action taken pursuant to Section 5.03 of the Indenture.
(b) The obligations of the Company under this Section 5.06 shall survive
the termination of this Agreement.
(c) It is the intention of the parties that the Issuer, its elected or
appointed officials, officers, agents, servants and employees shall not incur
any pecuniary liability by reason of the terms of this Agreement or the
Indenture, or the undertakings required of the Issuer hereunder or thereunder or
by reason of the issuance of the Bonds, the execution of the Indenture or the
performance of any act required of the Issuer by this Agreement or the Indenture
or requested of the Issuer by the Company.
Section 5.07. Records of Company; Maintenance and Operation of the
Projects. (a) The Trustee and the Issuer shall be permitted at all reasonable
times during the term of this Agreement to examine the books and records of the
Company with respect to the Projects; provided, however, that information and
data contained in the books and records of the Company shall be considered
proprietary and shall not be voluntarily disclosed by the Trustee or the Issuer
except as required by law.
(b) The Company shall cause the Projects to be maintained in good repair
and shall cause the Projects to be insured in accordance with standard industry
practice and shall pay all costs thereof. All proceeds of such insurance shall
be for the account of the Company.
(c) The Company may at its own expense cause the Projects to be remodeled
or cause such substitutions, modifications and improvements to be made to the
Projects from time to time as the Company, in its discretion, may deem to be
desirable for its uses and purposes, which remodeling, substitutions,
modifications and improvements shall be included under the terms of this
Agreement as part of the Projects; provided, however, that the Company shall not
exercise any such right, power, election or option if the proposed remodeling,
substitution, modification or improvement would adversely affect the Tax-Exempt
status of the Bonds.
-14-
(d) The Company shall be entitled to the proceeds of any condemnation award
or portion thereof made for damage to or taking of any of the Projects or other
property of the Company.
(e) Anything in this Agreement to the contrary notwithstanding, the Company
shall have the right at any time to cause the operation of the Plant to be
terminated if the Company shall have determined or concurred in a determination
that the continued operation of the Plant is uneconomical for any reason.
Section 5.08. Right of Access to the Projects. The Company agrees that the
Issuer, the Trustee and their respective duly authorized agents shall have the
right, for so long as the Company has an ownership interest in the Projects and
subject to such limitations, restrictions and requirements as the Company may
reasonably prescribe for plant security and safety reasons and in order to
preserve secret processes and formulae, at all reasonable times to enter upon
and to examine and inspect the Projects; provided, however, nothing contained
herein shall entitle the Issuer or the Trustee to any information or inspection
involving confidential material of the Company. Information and data contained
in the books and records of the Company shall be considered proprietary and
shall not be voluntarily disclosed by the Issuer or the Trustee except as
required by law. In the event that the Company sells or otherwise transfers its
interest in the Projects, the Company shall require the purchaser or transferee
of the Company's interest in the Projects to agree that the Issuer, the Trustee
and their respective duly authorized agents that they shall have the same
rights, and be subject to the same limitations, as are provided in this Section
with respect to the Projects.
Section 5.09. Remarketing Agent. So long as any of the Bonds are subject to
optional or mandatory purchase pursuant to the provisions of the Indenture
(except during a Term Interest Rate Period that extends to the maturity of the
Bonds), the Company shall cause a Remarketing Agent to be appointed and acting
pursuant to a Remarketing Agreement at all such times as shall be necessary in
order to provide for the remarketing of the Bonds and the establishment of
interest rates to be borne by the Bonds in accordance with the provisions of the
Indenture.
ARTICLE VI
ASSIGNMENT
Section 6.01. Conditions. The Company's interest in this Agreement may be
assigned in whole or in part by the Company: (a) to another entity, subject,
however, to the conditions that such assignment shall not relieve (other than as
described in Section 5.01(a)(ii) hereof) the Company from primary liability for
its obligations to make the Loan Payments or to make payments to the Trustee
under Section 4.02 hereof or for any other of its obligations hereunder, or (b)
to an Affiliate in connection with the conveyance of the Plant to such
Affiliate, subject, however, to the conditions that (i) such Affiliate meets the
requirements of Section 5.01(a)(ii) hereof (in which case the Company shall be
relieved of all obligations hereunder); (ii) such conveyance is approved by any
public utility commissions or similar
-15-
entities that are required by law to approve such conveyance; and (iii) the
Company shall have delivered to the Trustee an opinion of counsel to the Company
that such assignment complies with the provisions of this Section 6.01.
Anything herein to the contrary notwithstanding, the Company shall not make
any assignment as provided in the preceding paragraph unless it shall have
furnished to the Trustee an opinion of Bond Counsel to the effect that the
proposed assignment will not impair the validity of the Bonds under the Act or
adversely affect the Tax-Exempt status of the Bonds.
Section 6.02. Documents Furnished to Trustee. The Company shall, within 30
days after the delivery thereof, furnish to the Issuer and the Trustee a true
and complete copy of the agreements or other documents effectuating any
assignment pursuant to Section 6.01 hereof. The Trustee's only duties with
respect to any such agreement or other document so furnished to it shall be to
make the same available for examination by any Owner at the Principal Office of
the Trustee upon reasonable notice.
Section 6.03. Limitation. This Agreement shall not be assigned in whole or
in part, except as provided in this Article VI or in Section 4.03 or Section
5.01 hereof.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) a failure by the Company to make when due any Loan Payment or any
payment required under Section 4.01 or Section 4.02 hereof, which failure
shall have resulted in an "Event of Default" under Section 9.01(a), Section
9.01(b) or Section 9.01(c) of the Indenture;
(b) a failure by the Company to pay when due any amount required to be
paid under this Agreement or to observe and perform any covenant, condition
or agreement on its part to be observed or performed under this Agreement
(other than a failure described in Section 7.01 (a) above), which failure
shall continue for a period of 60 days (or such longer period as the Issuer
and the Trustee may agree to in writing) after written notice, specifying
such failure and requesting that it be remedied, shall have been given to
the Company by the Trustee or to the Company and the Trustee by the Issuer;
provided, however, that if such failure is other than for the payment of
money and is of such nature that it cannot be corrected within the
applicable period, such failure shall not constitute an "Event of Default"
so long as the Company institutes corrective action within the applicable
period and such action is being diligently pursued; or
-16-
(c) the dissolution or liquidation of the Company; or the filing by
the Company of a voluntary petition in bankruptcy; or failure by the
Company promptly to lift or bond any execution, garnishment or attachment
of such consequence as will impair its ability to make any payments under
this Agreement; or the filing of a petition or answer proposing the entry
of an order for relief by a court of competent jurisdiction against the
Company under Title 11 of the United States Code, as the same may from time
to time be hereafter amended, or proposing the reorganization, arrangement
or debt readjustment of the Company under the provisions of any bankruptcy
act or under any similar act which may be hereafter enacted and the failure
of said petition or answer to be discharged or denied within ninety (90)
days after the filing thereof or the entry of an order for relief by a
court of competent jurisdiction in any proceeding for its liquidation or
reorganization under the provisions of any bankruptcy act or under any
similar act which may be hereafter enacted; or an assignment by the Company
for the benefit of its creditors; or the entry by the Company into an
agreement of composition with its creditors (the term "dissolution or
liquidation of the Company," as used in this subsection (c), shall not be
construed to include the cessation of the corporate existence of the
Company resulting either from a merger or consolidation of the Company into
or with another corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all its assets as an entirety,
under the conditions permitting such actions contained in Section 5.01
hereto.
Section 7.02. Force Majeure. The provisions of Section 7.01(b) hereof are
subject to the following limitations: if by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies, orders of any
kind of the government of the United States or the State, or any department,
agency, political subdivision, court or official of any of such State or any
other state which asserts regulatory jurisdiction over the Company; orders of
any kind of civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes;
storms; floods; washouts; droughts; arrests; restraint of government and people;
civil disturbances; explosions; breakage or accident to machinery: partial or
entire failure of utilities; or any cause or event not reasonably within the
control of the Company, the Company is unable in whole or in part to carry out
any one or more of its agreements or obligations contained herein, other than
its obligations under Section 4.01, Section 4.02, Section 4.04, Section 4.05,
Section 4.06, Section 5.01 and Section 5.06 hereof, the Company shall not be
deemed in default by reason of not carrying out said agreement or agreements or
performing said obligation or obligations during the continuance of such
inability. The Company shall make reasonable effort to remedy with all
reasonable dispatch the cause or causes preventing it from carrying out its
agreements, provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company,
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the judgment of the Company unfavorable
to the Company.
-17-
Section 7.03. Remedies. (a) Upon the occurrence and continuance of any
Event of Default described in Section 7.01 (a) or Section 7.01(c) hereof, and
further upon the condition that, in accordance with the terms of the Indenture,
the Bonds shall have been declared to be immediately due and payable pursuant to
any provision of the Indenture, the Loan Payments shall without further action,
become and be immediately due and payable.
(b) Any waiver of any "Event of Default" under the Indenture and a
rescission and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Agreement and a rescission
and annulment of the consequences thereof.
(c) Upon the occurrence and continuance of any Event of Default, the Issuer
may take any action at law or in equity to collect any payments then due and
thereafter to become due hereunder or to seek injunctive relief or specific
performance of any obligation, agreement or covenant of the Company hereunder.
(d) Any amounts collected from the Company pursuant to this Section 7.03
shall be applied in accordance with the Indenture. No action taken pursuant to
this Section 7.03 shall relieve the Company from the Company's obligations
pursuant to Section 4.01 or Section 4.02 hereof.
Section 7.04. No Remedy Exclusive. No remedy conferred upon or reserved to
the Issuer hereby is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer to exercise any remedy reserved to it in this Article VII, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required.
Section 7.05. Reimbursement of Attorneys' Fees. If the Company shall
default under any of the provisions hereof and the Issuer or the Trustee shall
employ attorneys or incur other reasonable and proper expenses for the
collection of payments due hereunder or for the enforcement of performance or
observance of any obligation or agreement on the part of the Company contained
herein, the Company will on demand therefor reimburse the Issuer or the Trustee,
as the case may be, for the reasonable and proper fees of such attorneys and
such other reasonable and proper expenses so incurred.
Section 7.06. Waiver of Breach. In the event any obligation created hereby
shall be breached by either of the parties hereto and such breach shall
thereafter be waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. In view of the assignment of certain of the Issuer's rights and
interest hereunder to the Trustee, the Issuer shall have no power to waive any
Event of Default hereunder by the Company in respect of such rights and interest
without the consent of the Trustee, and the Trustee may exercise any of the
rights of the Issuer hereunder.
-18-
ARTICLE VIII
PURCHASE OR REDEMPTION OF BONDS
Section 8.01. Redemption of Bonds. The Issuer shall take or cause to be
taken the actions required by the Indenture (other than the payment of money) to
discharge the lien thereof through the redemption, or provision for payment or
redemption, of all Bonds then Outstanding, or to effect the redemption, or
provision for payment or redemption, of less than all the Bonds then
Outstanding, upon receipt by the Issuer and the Trustee from an Authorized
Company Representative of a written notice designating the principal amount of
the Bonds to be redeemed and specifying the date of redemption (which, unless
waived by the Issuer and the Trustee, shall not be less than 30 days from the
date such notice is given, or such shorter period as the Trustee and the Company
may agree from time to time) and the applicable redemption provision of the
Indenture. Unless otherwise stated therein, such notice shall be revocable by
the Company at any time prior to the time at which the Bonds to be redeemed, or
for the payment or redemption of which provision is to be made, are first deemed
to be paid in accordance with Article VIII of the Indenture. The Company shall
furnish any moneys required by the Indenture to be deposited with the Trustee or
otherwise paid by the Issuer in connection with any of the foregoing purposes.
In connection with any redemption of the Bonds, the Company shall provide to the
Trustee the names and addresses of the Securities Depositories and Information
Services as contemplated by Section 4.05 of the Indenture.
Section 8.02. Purchase of Bonds. The Company may at any time, and from time
to time, furnish moneys to the Trustee accompanied by a notice directing such
moneys to be applied to the purchase of Bonds in accordance with the provisions
of the Indenture delivered pursuant to the Indenture, which Bonds shall, at the
direction of the Company, be delivered in accordance with Section 3.06(a)(ii) of
the Indenture.
Section 8.03. Obligation to Prepay. (a) The Company shall be obligated to
prepay in whole or in part the amounts payable hereunder upon a Determination of
Taxability (as defined below) giving rise to a mandatory redemption of the Bonds
pursuant to Section 4.03 of the Indenture, by paying an amount equal to, when
added to other funds on deposit in the Bond Fund, the aggregate principal amount
of the Bonds to be redeemed pursuant to the Indenture plus accrued interest to
the redemption date.
(b) The Company shall cause a mandatory redemption to occur within 180 days
after a Determination of Taxability (as defined below) shall have occurred. A
"Determination of Taxability" shall be deemed to have occurred if as a result of
the failure of the Company to observe any covenant, agreement or representation
in this Agreement, which failure results in a final decree or judgment of any
federal court or a final action of the Internal Revenue Service which determines
that interest paid or payable on any Bond is or was includible in the gross
income of an Owner of the Bonds for federal income tax purposes under the Code
(other than an Owner who is a "substantial user" or "related person" within the
meaning of Section 103(b)(13) of the 1954 Code). However, no such decree or
action will be considered final for this purpose unless the Company has been
given written notice of the same, either directly or in the name of any Owner of
a Bond and if it so desires and is legally allowed, has
-19-
been afforded the opportunity to contest the same, either directly or in the
name of any Owner of a Bond, and until conclusion of any appellate review, if
sought. If the Trustee receives written notice from any Owner of a Bond stating
(a) that the Owner has been notified in writing by the Internal Revenue Service
that it proposes to include the interest on any Bond in the gross income of such
Owner for the reasons described therein or any other proceeding has been
instituted against such Owner which may lead to a final decree or action as
described herein, and (b) that such Owner will afford the Company the
opportunity to contest the same, either directly or in the name of the Owner,
until a conclusion of any appellate review, if sought, then the Trustee shall
promptly give notice thereof to the Company, the Issuer and the Owner of each
Bond then Outstanding. If a final decree or action as described above thereafter
occurs and the Trustee has received written notice thereof as provided in
Section 8.01 hereof at least 45 days prior to the redemption date, the Trustee
shall make the required demand for prepayment of the amounts payable hereunder
and give notice of the redemption of the Bonds at the earliest practical date,
but not later than the date specified in this Article, and in the manner
provided by Section 4.05 of the Indenture.
At the time of any such prepayment of the amounts payable hereunder
pursuant to this Section, the prepayment amount shall be applied, together with
other available moneys in the Bond Fund, to the redemption of the Bonds on the
date specified in the notice as provided in the Indenture, whether or not such
date is an Interest Payment Date, to the Trustee's fees and expenses under the
Indenture accrued to such redemption of the Bonds, and to all sums due to the
Issuer under this Agreement.
Whenever the Company shall have given any notice of prepayment of the
amounts payable hereunder pursuant to this Article VIII, which includes a notice
for redemption of the Bonds pursuant to the indenture, all amounts payable under
the first paragraph of this Section 8.03 shall become due and payable on the
date fixed for redemption of such Bonds.
Section 8.04. Compliance with Indenture. Anything in this Agreement to the
contrary notwithstanding, the Issuer and the Company shall take all actions
required by this Agreement and the Indenture in order to comply with the
provisions of Articles III and IV of the Indenture.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Term of Agreement. This Agreement shall remain in full force
and effect from the date of delivery hereof until the right, title and interest
of the Trustee in and to the Trust Estate shall have ceased, terminated and
become void in accordance with Article VIII of the Indenture and until all
payments required under this Agreement shall have been made. The date first
above written shall be for identification purposes only and shall not be
construed to imply that this Agreement was executed on such date.
-20-
Section 9.02. Notices. Except as otherwise provided in this Agreement, all
notices, certificates, requests, requisitions and other communications hereunder
shall be in writing and shall be sufficiently given and shall be deemed given
when mailed by Mail or by certified or registered mail postage prepaid, or by
overnight delivery service, addressed as follows (and, if by overnight delivery,
with the then-current telephone number of the addressee): if to the Issuer, City
Hall, Forsyth, Montana 59327, Attention: Mayor; if to the Company, 000 X.X.
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, Attention: Treasurer; if to the Trustee,
at such address as shall be designated by it in the Indenture; and if to the
Remarketing Agent at such address as shall be designated by such party pursuant
to the Remarketing Agreement. A copy of each notice, certificate, request or
other communication given hereunder to the Issuer, the Company, the Trustee and
the Remarketing Agent shall also be given to the others. Any of the foregoing
parties may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
Section 9.03. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, and no other person, firm or corporation
shall have any right, remedy or claim under or by reason of this Agreement
except for rights of payment and indemnification hereunder of the Trustee and
the Registrar. Section 9.05 hereof to the contrary notwithstanding, for purposes
of perfecting a security interest in this Agreement by the Trustee, only the
counterpart delivered, pledged and assigned to the Trustee shall be deemed the
original. No security interest in this Agreement may be created by the transfer
of any counterpart thereof other than the original counterpart delivered,
pledged and assigned to the Trustee.
Section 9.04. Amendments. This Agreement may be amended only by written
agreement of the Company and the Issuer and with the written consent of the
Trustee in accordance with the provisions of Section 12.05 or 12.06 of the
Indenture, as applicable; provided, however, that Exhibit A to this Agreement
may be amended upon compliance only with the requirements of Section 3.04
hereof.
Section 9.05. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original (except as expressly provided in Section 9.03 hereof), and such
counterparts shall together constitute but one and the same Agreement.
Section 9.06. Severability. If any clause, provision or Section of this
Agreement shall, for any reason, be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 9.07. Governing Law. This Agreement shall be governed exclusively
by and construed in accordance with the laws of the State.
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CITY OF FORSYTH, MONTANA
By:
---------------------------------
Mayor
[SEAL]
ATTEST:
By:
-----------------------------------
City Clerk-Treasurer
PORTLAND GENERAL ELECTRIC COMPANY
By:
---------------------------------
Vice President, Finance and Treasurer
-22-
EXHIBIT A
1983 PROJECT
DESCRIPTION OF COLSTRIP UNITS 3 AND 4
POLLUTION CONTROL FACILITIES
1. SULFUR DIOXIDE AND PARTICULATE REMOVAL SYSTEM
SCRUBBER SYSTEM
The air pollution control facilities employed on Units 3 and 4 consist of
complete scrubber systems, including duct work, plenums, scrubber vessels,
reheaters and induced draft fans, together with infrastructures, monitoring and
electrical controls and instrumentation therefor, for the purpose of removing
the sulfur dioxide (S02) and particulate matter from the flue gas. The scrubber
system utilizes the Wet Venturi Principle and consists of modules for each unit
through which the steam generator gases from the burned coal must pass. Within
the stated performance of the system, the reduction of the particulate content
is accomplished when the flue gases pass through the wet atmosphere inside the
scrubber vessels. The sulfur dioxide reacts with the alkali contained in the
slurry which resulted from the mixing of water and particulates. A major portion
of the sulfur dioxide changes to solid sulfur components which are retained in
the scrubber liquid and can therefore be piped to and deposited in an ash pond
together with the particulate.
After the flue gas passes through the venturi section and counter current
sprays and wash trays, it is processed through a demister which removes the
excess water and is then reheated and discharged through the stack.
The slurry to the Units 3 and 4 scrubber system consists of recycle tanks,
regenerators, agitators, pumps and lines. The slurry from the Units 3 and 4
scrubber system is transported to existing fly ash slurry ponds and involves the
use of effluent holding tanks, agitators, wash tray tanks and a wash tray pond.
Reclaimed water from the existing fly ash clear water ponds and a new wash tray
pond is circulated back into the scrubber system.
LIME SYSTEM
The sole purpose of the lime system will be to supply the lime slurry
needed by the scrubber regenerators. There will be one lime system that serves
the sixteen scrubbers for Units 3 and 4. Major components of the system include
four slakers, in which calcined high calcium lime will be reacted with water to
produce a hydrated lime slurry, slurry transfer tanks, where the slurry is
diluted with water and mixed with dry hydrated dolomitic lime, slurry feed
storage tanks, where the slurry will be held for use by the regenerators as
needed, hydrators, for mixing calcined dolomitic lime with water, and agitators.
A-1
FLY ASH SLURRY DISPOSAL
Existing facilities, constructed for Units 1 and 2, are used for the
disposal of the fly ash. The slurry from the Units 3 and 4 scrubber systems is
piped to the existing fly ash slurry pond. The existing dredge system will be
used to transport the slurry to the evaporation ponds. The Units 1 and 2
installed dredge systems are designed to permit slurry and reclaim water to be
pumped over the same line. With Units 3 and 4 in service, the dredge will
operate to pump slurry from the fly ash ponds to the area 29 evaporation pond.
This means that the return reclaim water cannot be handled over the same line.
Thus, a new 16" rubber lined (16-NWT) pipeline will be installed to handle the
reclaim water. Necessary low point drains will be provided to drain the line to
the existing drain sumps. Also, some minor modifications to the valving is
required at each end of the line.
BOTTOM ASH DISPOSAL SYSTEM
The function of the bottom ash disposal system is to remove accumulations
of furnace bottom ash, pulverizer pyrites, economizer ash, and air preheater fly
ash by means of a water-ash slurry to a disposal pond located approximately
2,800 feet southeast of the plant site. The system consists generally of three
sets of fly ash hoppers (economizer, air heater and flue gas-duct hoppers),
pyrite hoppers, the bottom ash xxxxxx, and 18,000 gallon transfer tank, a
settling pond, a clear water pond and various pumps, pipes and lines.
Clinker grinders are used to grind the bottom ash which is then mixed with
water and sluiced to the bottom ash transfer tank.
The economizer ash is ground and collected in economizer ash storage tanks
and sluiced to the bottom ash xxxxxx.
The pyrites are collected in local tanks and sluiced to the pyrites holding
tank. From there the slurry is sluiced to the bottom ash transfer tank.
Reclaimed water is returned from the bottom ash disposal pond and
redistributed to the various sections of the bottom ash disposal system.
The solid waste disposal facilities for purposes of the issuance of the
Bonds includes only so much of the bottom ash disposal system as is external to
the plant building and includes piping from the building to the settling pond,
the pond itself, return water pumps and lines, a clear water pond and piping
back to the plant building.
A-2
1984 PROJECT
1. POLLUTION CONTROL EQUIPMENT
SCRUBBER SYSTEM
The air pollution control facilities employed on Units #3 and #4 consist of
a complete scrubber system, including duct work, plenums, scrubber vessels,
reheaters and induced draft fans, together with infrastructures, monitoring and
electrical controls and instrumentation, therefor, for the purpose of removing
the sulfur dioxide (SO2) and particulate matter from the flue gas. The scrubber
system utilizes the Wet Venturi Principle and consists of eight modules for each
unit through which the steam generator gases from the burned coal must pass.
The gases in the scrubber are contacted with finely atomized scrubber
slurry. Within the stated performance of the system, fly ash particulates are
removed by the slurry droplets. The sulfur dioxide reacts with the alkali
contained in the slurry which results from the mixing of water, fly ash
particulates, hydrated high calcium lime and hydrated dolomitic lime. A major
portion of the sulfur dioxide is converted to solid sulfur components which are
retained in the scrubber liquid and can, therefore, be piped to and deposited in
an ash pond together with the particulate.
After the flue gas passes through the venturi section, absorption sprays
and wash trays, it is processed through a demister which removes any entrained
slurry and is then reheated and discharged through the stack.
The slurry system to the Units #3 and #4 scrubber system consists of
recycle tanks, regenerators, agitators, pumps and pipelines. The slurry from the
Units #3 and #4 scrubber system is transported to an effluent holding pond and
involves the use of effluent holding tanks, agitators, pumps and pipelines. A
separate wash tray pond system is used to store the suspended solids collected
from the wash tray system. Reclaimed water from the clear water section of these
ponds is circulated back into the scrubber system.
LIME STORAGE
The sole purpose of the lime system will be to supply the lime slurry
requirements of the scrubber regeneration system. There is one lime system that
serves the sixteen scrubbers for Units #3 and #4. Major components of the system
include four slakers, in which calcined high calcium lime is reacted with water
to produce a hydrated lime slurry, slurry transfer tanks, where the slurry is
diluted with water and mixed with dry hydrated dolomitic lime, slurry feed
storage tanks, where the slurry will be held for use by the regenerators as
needed, hydrators, for mixing calcined dolomitic lime with water, and agitators.
A-3
SCRUBBER SLUDGE DISPOSAL
Effluent slurry is pumped from the plant to the sludge disposal pond
located approximately three miles southeast of the plant. The suspended solids
settle to the pond bottom and the clear water is pumped back to the plant.
There are two phases in the development of this pond. The first phase
requires the construction of one dam 108 feet high and 1,100 feet in length. A
saddle dam must also be added. The saddle dam will vary in height with a maximum
height for this phase of 36 feet and be approximately 2,800 feet in length. The
capacity of Phase 1 will be 6,650 acre-feet and it will last approximately 10
years.
The development of the second phase will require that the original dam be
raised to 138 feet in height and increased to a length of 2,500 feet. The saddle
dam will be raised to a maximum height of 66 feet and a total length of 3,500
feet. The capacity of the second phase will be an additional 7,000 acre-feet and
it will last approximately 12 years, for a total life of 22 years. The
construction of the second phase is not included in cost reported at this time.
The sludge disposal pond design takes into account a permit requirement for
minimum seepage, by providing low permeability plastic concrete filled trenches
around the periphery of the pond constructed during the course of Phase 1 work.
2. SOLID WASTE DISPOSAL
BOTTOM ASH DISPOSAL
The function of the bottom ash disposal system is to remove accumulations
of furnace bottom ash, pulverizer pyrites, economizer ash, and air preheater fly
ash by means of a water-ash slurry to a disposal pond located approximately
2,000 feet southeast of the plant site. The system consists generally of three
sets of fly ash hoppers (economizer, air heater and flue gas duct hoppers),
pyrite hoppers, the bottom ash xxxxxx, and 18,000 gallon transfer tank, a
settling pond, a clear water pond and various pumps, and pipelines.
Clinker grinders are used to grind the bottom ash which is then mixed with
water and sluiced to the bottom ash transfer tank.
The economizer ash is collected in economizer hoppers falls by gravity to
the ash transfer tank.
The pyrites are collected in local tanks and sluiced to the ash transfer
tank.
Ash collected in the flue gas duct hoppers and air preheater hoppers is
sluiced to the ash transfer tank.
A-4
These ashes are pumped from the ash transfer tank to the bottom ash pond.
Reclaimed water is returned from the bottom ash disposal pond and redistributed
to the various sections of the bottom ash disposal system.
The solid waste disposal facilities for purposes of the issuance of the
Bonds include only so much of the bottom ash disposal system as is external to
the plant building and include piping from the building to the settling pond,
the pond itself, return water pumps and lines, a clear water pond and piping
back to the plant building.
3. WATER POLLUTION CONTROL
NORTH PLANT SEDIMENT POND
The north plant sediment pond is designed to collect and store the storm
runoff from the general north plant area. These waters are retained in the pond,
allowing natural evaporation to desiccate the pond. This prevents high
quantities of suspended solids from being discharged to Armells Creek or other
state surface waters.
NORTH PLANT AREA DRAINAGE SYSTEM
The north plant area drainage system is designed to collect and store storm
runoff from the water treatment building, fuel oil handling area and the cooling
tower area in the north plant area drain pond. The pond also serves as a storage
facility for one cooling tower basin drain, cooling tower overflow, water
treatment filter backwash, and for the cooling tower blowdown water not used in
the flue gas scrubbing process. These waters are potentially contaminated with
oil and high suspended and dissolved solids, and this system stores these
discharges preventing any discharge to Armells Creek or other state surface
waters. The north plant area drainage system consists of collection basins and
piping which route these discharges to the north plant area sump and north plant
area drain pond. The north plant area drain pond incorporates a hypalon liner to
comply with a permit requirement for minimum seepage. The oil separator section
of the sump receives oily surface collection drains. The oil and water are
separated. The oil from the sump is then trucked away for disposal.
The water discharges are either pumped to the scrubber effluent holding
pond via a 6" diameter pipeline, 19,000 feet in length for evaporation, to the
circulating water system, or to the plant oily waste sump as appropriate. Each
discharge arrangement has its own set of sump pumps. The pumps and piping system
which discharge to the plant oily waste sump are not included in the costs
covered by this Report, nor is the circulating water system. The waters
recovered are excess to any plant requirements and recovery of the waters does
not provide any economic benefit to the plant.
GROUNDWATER MONITORING XXXXX
Groundwater monitoring xxxxx have been installed around the various ponds
associated with the plant operation. These ponds include the scrubber effluent
holding pond, the
A-5
scrubber drain pond, the scrubber wash tray pond, the bottom ash pond, and the
north plant area effluent pond. These groundwater monitoring xxxxx provide the
ability through sampling to detect and quantify accidental discharges from the
above mentioned plant storage and waste ponds. This is necessary to show
compliance with State Groundwater Standards and with permit requirements for
minimum seepage.
