Exhibit C(9)
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LEASE AND SUBLEASE AGREEMENT
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$16,700,000
▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
VARIABLE RATE DEMAND POLLUTION CONTROL REVENUE BONDS
(PORTLAND GENERAL ELECTRIC COMPANY PROJECT)
1985 SERIES B
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Dated as of June 1, 1985
LEASE AND SUBLEASE AGREEMENT
TABLE OF CONTENTS
PARTIES......................................................................1
PREAMBLES....................................................................1
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms............................................2
SECTION 1.2. Number and Gender..............................................2
SECTION 1.3. Articles, Sections, ETC........................................2
ARTICLE II
REPRESENTATIONS
SECTION 2.1. Representations of the Issuer..................................2
SECTION 2.2. Representations of the Company.................................4
ARTICLE III
ACQUISITION AND CONSTRUCTION OF
THE PROJECT; ISSUANCE OF THE BONDS
SECTION 3.1. Agreement to Acquire and Construct the Project.................5
SECTION 3.2. Agreement to Issue Bonds; Application of Bond Proceeds.........6
SECTION 3.3. Disbursements from the Construction Fund.......................6
SECTION 3.4. Establishment of Completion Date;
Obligation of Company to Complete............................8
SECTION 3.5. Investment of Moneys in Funds..................................9
SECTION 3.6. Special Tax Certifications....................................10
SECTION 3.7. Issuance of Additional Bonds..................................10
SECTION 3.8. Rebate of Arbitrage to the United States......................11
ARTICLE IV
LEASE AND SUBLEASE OF PROJECT; PAYMENT PROVISIONS
SECTION 4.1. Lease and Sublease of Project.................................12
SECTION 4.2. Rental Payments and Payment of Other Amounts Payable..........12
SECTION 4.3. Unconditional Obligation......................................14
SECTION 4.4. Assignment of Issuer's Rights.................................15
SECTION 4.5. Letter of Credit..............................................15
SECTION 4.6. Amounts Remaining in Funds....................................17
SECTION 4.7. Quiet Enjoyment...............................................17
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. Right of Access to the Project................................18
SECTION 5.2. The Company Maintenance of its Existence; Assignments.........18
SECTION 5.3. Records and Financial Statements of Company...................20
SECTION 5.4. Maintenance and Repair; Taxes; Utility and Other Charges......21
SECTION 5.5. Qualification in Oregon.......................................21
SECTION 5.6. Tax Exempt Status of 1985 Series B Bonds......................21
SECTION 5.7. Notice of Interest Rate Periods...............................22
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.............................................23
SECTION 6.2. Remedies on Default...........................................24
SECTION 6.3. Agreement to Pay Attorneys' Fees and Expenses.................26
SECTION 6.4. No Remedy Exclusive...........................................26
SECTION 6.5. No Additional Waiver Implied by One Waiver....................26
ARTICLE VII
PREPAYMENT
SECTION 7.1. Redemption of Bonds with Prepayment Moneys....................27
SECTION 7.2. Optional Prepayment...........................................27
SECTION 7.3. Mandatory Prepayment..........................................27
SECTION 7.4. Amount of Prepayment..........................................28
SECTION 7.5. Notice of Prepayment..........................................28
ARTICLE VIII
NON-LIABILITY OF ISSUER; EXPENSES; INDEMNIFICATION
SECTION 8.1. Non-Liability of Issuer.......................................29
SECTION 8.2. Expenses......................................................29
SECTION 8.3. Indemnification...............................................30
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices.......................................................31
SECTION 9.2. Severability..................................................31
SECTION 9.3. Execution of Counterparts.....................................32
SECTION 9.4. Amendments, Changes and Modifications.........................32
SECTION 9.5. Governing Law.................................................32
SECTION 9.6. Authorized Company Representative.............................32
SECTION 9.7. Term of the Agreement.........................................32
SECTION 9.8. Binding Effect................................................32
TESTIMONIUM ............................................................33
SIGNATURES AND SEALS........................................................33
EXHIBIT A Description of the Project .......................................34
LEASE AND SUBLEASE AGREEMENT
THIS LEASE AND SUBLEASE AGREEMENT, dated as of June 1, 1985, by and
between the ▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇, a municipal corporation of the State of
Oregon (the "Issuer"), and PORTLAND GENERAL ELECTRIC COMPANY, a Oregon
corporation (the "Company"),
W I T N E S S E T H :
WHEREAS, Oregon Revised Statutes Chapter 777 (the "Act") provides that
municipal corporations designated as ports and incorporated thereunder are
authorized and shall have the power to issue revenue bonds for the purpose of
carrying into effect the construction and improvements and the acquisition of
personal properties suitable for use by any industry, to acquire any interest in
real or personal property necessary or convenient in carrying out its powers and
to lease the same to others; and
WHEREAS, the Act provides that such bonds shall be payable solely from
the revenues derived from such facilities and shall be secured by a pledge of
the revenues out of which such bonds shall be payable; and
WHEREAS, in accordance with the provisions of the Act, the Issuer has
authorized and undertaken through rental payments to provide funds to assist in
the financing of the acquisition and construction of a portion of certain air
and water pollution control and solid waste disposal facilities (the "Project")
for use by Portland General Electric Company, an Oregon corporation (the
"Company") at the Trojan Nuclear Power Plant (the "Facility") located in
Columbia County, Oregon; and
WHEREAS, the Issuer proposes to issue its Port of St. Helens, Oregon
Variable Rate Demand Pollution Control Revenue Bonds (Portland General Electric
Company Project) 1985 Series B (the "1985 Series B Bonds"), in the principal
amount of $16,700,000 and to finance the Project upon the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations and covenants herein contained, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, the terms used in this Agreement shall have the meanings specified in
Section 1.01 of the Indenture of Trust, dated as of June 1, 1985, by and between
the Issuer and Chemical Bank, as Trustee (the "Trustee"), as originally executed
or as it may from time to time be supplemented or amended as provided therein
(the "Indenture").
SECTION 1.2. NUMBER AND GENDER. The singular form of any word used
herein, including the terms defined in Section 1.01 of the Indenture, shall
include the plural, and vice versa. The use herein of a word of any gender shall
include all genders.
SECTION 1.3. ARTICLES, SECTIONS, ETC. Unless otherwise specified,
references to Articles, Sections and other subdivisions of this Agreement are to
the designated Articles, Sections and other subdivisions of this Agreement. The
words "hereof," "herein," "hereunder" and words of similar import refer to this
Agreement as a whole. The headings or titles of the several articles and
sections, and the table of contents appended to copies hereof, shall be solely
for convenience of reference and shall not affect the meaning, construction or
effect of the provisions hereof.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS OF THE ISSUER. The Issuer makes the
following representations as the basis for its undertakings herein contained:
(a) The Issuer is a municipal corporation of the State of Oregon.
Under the provisions of the Act, the Issuer has the power to enter into the
transactions contemplated by this Agreement and to carry out its obligations
hereunder. By proper action, the Issuer has been duly authorized to execute,
deliver and duly perform this Agreement.
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(b) To finance the Cost of the Project, the Issuer will issue the 1985
Series B Bonds, which will mature, bear interest, be subject to redemption, and
contain such other terms as provided in the Indenture.
(c) The Bonds will be issued under and secured by the Indenture,
pursuant to which the Issuer's interest in this Agreement (except certain rights
of the Issuer to payment for expenses and indemnification) will be pledged to
the Trustee as security for payment of the principal of, premium, if any, and
interest on the Bonds.
(d) The Issuer has not pledged and will not pledge its interest in
this Agreement for any purpose other than to secure the Bonds under the
Indenture.
(e) The Issuer is not in default under any of the provisions of the
laws of the State of Oregon which default would affect its existence or its
powers referred to in subsection (a) of this Section 2.1.
(f) The Issuer has found and determined and hereby finds and
determines that all requirements of the Act with respect to the issuance of the
1985 Series B Bonds and the execution of this Agreement have been complied with
and that financing the Project by issuing the 1985 Series B Bonds and entering
into this Agreement will be in furtherance of the purposes of the Act.
(g) On August 24, 1973 and October 31, 1984, the Issuer adopted
Memoranda of Agreement and on January 9, 1985, the Issuer adopted its resolution
preliminarily approving the financing of the Project.
(h) The Issuer has taken proper action to allocate to the 1985 Series
B Bonds a share of the State ceiling on private activity bonds (as defined in
Section 103(n) of the Code) for the current calendar year which was available to
the Issuer in an amount equal to $62,000,000. Issuance of the 1985 Series B
Bonds will not violate any provisions of Section 103(n).
(i) No member, officer or other official of the Issuer has any
interest whatsoever in the Company or in the transactions contemplated by this
Agreement.
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SECTION 2.2. REPRESENTATIONS OF THE COMPANY. The Company makes the
following representations as the basis for its undertakings herein contained:
(a) The Company is an Oregon corporation, is in good standing in the
State of Oregon and has the power to enter into and has duly authorized, by
proper corporate action, the execution and delivery of this Agreement, the
Reimbursement Agreement, the Bond Purchase Agreement and all other documents
contemplated hereby to be executed by the Company.
(b) Neither the execution and delivery of this Agreement, the Bond
Purchase Agreement or the Reimbursement Agreement, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions hereof and thereof, conflicts with or
results in a breach of any of the terms, conditions or provisions of the
Company's Articles of Incorporation or by-laws or of any corporate actions or of
any agreement or instrument to which the Company is now a party or by which it
is bound, or constitutes a default (with due notice or the passage of time or
both) under any of the foregoing, or results in the creation or imposition of
any prohibited lien, charge or encumbrance whatsoever upon any of the property
or assets of the Company under the terms of any instrument or agreement to which
the Company is now a party or by which it is bound.
(c) The estimated Cost of the Project is as set forth in the
Engineering Certificate. (as hereinafter defined) and has been determined in
accordance with sound engineering and generally accepted accounting principles.
(d) The Project consists and will consist of those facilities
described in Exhibit A hereto, and the Company shall make no changes to the
Project or to the operation thereof which would affect the qualification of the
Project under the Act or impair the exemption from federal income taxation of
the interest on the 1985 Series B Bonds. The Company intends to utilize the
Project as pollution control and solid waste disposal facilities until the
principal of, the premium, if any, and the interest on the Bonds shall have been
paid.
(e) The Company has and will have title to the Project sufficient to
carry out the purposes of this Agreement.
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(f) The Project consists of pollution control facilities and solid
waste disposal facilities as described in the certificate of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, with respect to the pollution control and solid waste disposal
facilities, dated as of June 19, 1985 (the "Engineering Certificate"), and
hereby incorporated by reference herein.
(g) All certificates, approvals, permits and authorizations with
respect to the acquisition and construction of the Project of agencies of
applicable local governmental units, the State of Oregon and the federal
government have been or will be obtained.
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE PROJECT;
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO ACQUIRE AND CONSTRUCT THE PROJECT. The
Company agrees that it will acquire, construct and install, or complete the
acquisition, construction and installation of, the Project, and will acquire,
construct and install all other facilities and real and personal property deemed
necessary for the operation of the Project, substantially in accordance with the
plans and specifications prepared therefor by the Company and approved by the
Issuer, and, where required, by appropriate state, local and federal agencies
exercising jurisdiction over the Facility, including any and all supplements,
amendments and additions or deletions. thereto or therefrom, it being understood
that the approval of the Issuer shall not be required for changes in such plans
and specifications which do not alter the purpose and description of the Project
as set forth in Exhibit A hereto. The Company further agrees to proceed with due
diligence to complete the Project within three years from the date hereof.
In the event that the Company desires to amend or supplement the
Project, and such amendment or supplement alters the purpose and description of
the Project as described in Exhibit A hereto, and the Issuer approves of such
amendment or supplement, the Issuer will enter into, and will instruct the
Trustee to consent to, such amendment or supplement upon receipt of:
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(i) a certificate of the Authorized Company Representative
describing in detail the proposed changes and stating that they will not have
the effect of disqualifying the Project as a facility that may be financed
pursuant to the Act;
(ii) a copy of the proposed form of amended or supplemented
Exhibit A hereto; and
(iii) an opinion of Bond Counsel that such proposed changes will
not affect the exemption from federal income taxation of interest on the Bonds.
SECTION 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.
To provide funds to finance the Cost of the Project, the Issuer agrees that it
will issue under the Indenture, sell and cause to be delivered to the purchasers
thereof, the 1985 Series B Bonds, bearing interest, maturing, and containing
such other terms as provided in the Indenture. The Issuer will thereupon deposit
the proceeds received from the sale of the 1985 Series B Bonds as provided in
the Indenture.
SECTION 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The Company
will authorize and direct the Trustee, upon compliance with Section 3.03 of the
Indenture, to disburse the moneys in the Construction Fund to or on behalf of
the Company only for the following purposes, subject to the provisions of
Section 3.5 hereof:
(a) Payment to the Company of such amounts, if any, as shall be
necessary to reimburse the Company in full for all advances and payments made by
it, at any time prior to or after the delivery of the 1985 Series B Bonds, in
connection with (i) the preparation of plans and specifications for the Project
(including any preliminary study or planning of the Project or any aspect
thereof) and (ii) subject to any limitation imposed by subsection (h) hereof,
the acquisition, construction and installation of the Project.
(b) Payment of the initial or acceptance fee of the Trustee, the
Depository Agent, the Issuer and the Credit Bank, the fees of the Trustee and
any Paying Agent incurred during the Construction Period; legal, underwriting,
financial consulting, accounting and rating agency fees and expenses and
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printing and engraving costs incurred in connection with the authorization, sale
and issuance of the Bonds; the execution of the Indenture and the preparation of
all other documents in connection therewith; and payment of all fees, costs and
expenses incurred with respect to the preparation of this Agreement, the
Indenture, the Bonds, the Reimbursement Agreement and all other documents in
connection therewith.
(c) Payment for labor, services, materials and supplies used by or
furnished to the Company to improve the site and to acquire and construct the
Project, as provided in the plans, specifications and work orders therefor;
payment of the costs of acquiring, constructing, and installing utility services
or other related facilities; payment of the costs of acquiring all real and
personal property deemed necessary to construct the Project; and payment of the
miscellaneous expenses incidental to any of the foregoing items.
(d) Payment of the fees, if any, of architects, engineers, legal
counsel and supervisors expended in connection with the acquisition and
construction of the Project.
(e) Payment of the taxes, assessments and other charges, if any, that
may become payable during the Construction Period with respect to the Project,
or reimbursement thereof, if paid by the Company.
(f) Payment of expenses incurred in seeking to enforce any remedy
against any contractor or subcontractor in respect of any default under a
contract relating to the acquisition, construction or installation of the
Project.
(g) Interest required to be paid on the Bonds during the construction
Period.
(h) Payment of any other cost of the Project, as described in the
Engineering Certificate.
All moneys remaining in the Construction Fund after the Completion
Date and after payment or provision for payment of all other items provided for
in the preceding subsections (a) to (h), inclusive, of this Section, shall be
used in accordance with Section 3.03 of the Indenture.
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Each of the payments referred to in this Section 3.3 shall be made
upon receipt by the Trustee of a written requisition in the form prescribed by
Section 3.03 of the Indenture, signed by the Authorized Company Representative.
SECTION 3.4. ESTABLISHMENT OF COMPLETION DATE; OBLIGATION OF COMPANY
TO COMPLETE. As soon as the Project is completed, the Authorized Company
Representative, on behalf of the Company, shall evidence the Completion Date by
providing a certificate to the Trustee and the Issuer stating the amounts to be
retained by the Trustee for Costs of the Project not then due and payable or the
liability for which the Company is contesting and that, except for such amounts
(i) construction of the Project has been completed substantially in accordance
with the plans, specifications and work orders therefor, and all labor,
services, materials and supplies used in construction have been paid for, and
(ii) all other facilities necessary in connection with the Project have been
acquired, constructed and installed in accordance with the plans and
specifications and work orders therefor and all costs and expenses incurred in
connection therewith have been paid or provided for. Notwithstanding the
foregoing, such certificate may state that it is given without prejudice to any
rights of the Company against third parties for the payment of any amount not
then due and payable which exist at the date of such certificate or which may
subsequently exist.
As soon as practicable after such certificate is delivered to the
Trustee, moneys remaining in the Construction Fund, including any earnings
resulting from the investment of such moneys, shall be used as provided in
Section 3.03 of the Indenture.
In the event the moneys in the Construction Fund available for payment
of the Cost of the Project should be insufficient to pay the costs thereof in
full, the Company agrees to pay directly, or to deposit in the Construction Fund
moneys sufficient to pay, any costs of completing the Project in excess of the
moneys available for such purpose in the Construction Fund. The Issuer makes no
express or implied warranty that the moneys deposited in the Construction Fund
and available for payment of the Cost of the Project, under the Provisions of
this Agreement, will be sufficient to pay all the amounts which may be incurred
for such Cost. The Company agrees that if, after exhaustion of the moneys in the
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Construction Fund, the Company should pay, or deposit moneys in the Construction
Fund for the payment of, any portion of the Cost of the Project pursuant to the
provisions of this Section, it shall not be entitled to any reimbursement
therefor from the Issuer, from the Trustee or from the holders of any of the
Bonds, nor shall it be entitled to any diminution of the amounts payable under
Section 4.2 hereof.
SECTION 3.5. INVESTMENT OF MONEYS IN FUNDS. Any moneys held as a part
of the Construction Fund or the Bond Fund shall, at the direction of an
Authorized Company Representative, which direction may be oral, but which shall
be confirmed in writing, be invested or reinvested by the Trustee in Permitted
Investments; provided that moneys held in the Bond Fund which are drawings under
the Letter of Credit shall not be invested. Any such direction by an Authorized
Company Representative shall expressly state that the securities to be acquired
as a result of any such investment or reinvestment by the Trustee will
constitute Permitted Investments and comply with this Section 3.5, and with the
limitations in Sections 3.03 and 5.04 of the Indenture. If such direction is
oral, the Trustee shall be protected in acting upon such direction if the person
giving such oral direction represents himself to be an Authorized Company
Representative and the Trustee has no reason to believe otherwise. The Company
shall not direct the Trustee to make any investments or reinvestments other than
those permitted by law. In making any such investments, the Trustee may rely on
directions delivered to it pursuant to this Section, and the Trustee shall be
relieved of all liability with respect to making such investments in accordance
with such directions.
Any Permitted Investments may be purchased at the offering or market
price thereof at the time of such purchase and all such investments shall mature
in such amounts and at such times, or shall be readily marketable prior to their
maturities, as the Company may direct.
The Trustee may make any and all such investments through its own bond
department. Any interest accruing on or profit realized from the investment of
any moneys held as part of the Bond Fund or the Construction Fund shall be
credited to the respective Fund or Account in which such investment is held and
any loss resulting from such investment shall be charged to the respective Fund
or Account in which such investment is held.
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For the purposes of this Section, any interest-bearing deposits,
including certificates of deposit, issued by or on deposit with the Trustee
shall be deemed to be investments and not deposits.
SECTION 3.6. SPECIAL TAX CERTIFICATIONS. The Issuer hereby certifies
to the Company that it has not been notified of any listing or proposed listing
of it by the Internal Revenue Service as a bond issuer whose arbitrage
certifications may not be relied upon.
The Company hereby covenants and represents to the Issuer, and, based
upon said representations, the Issuer and the Company jointly and severally
covenant with all purchasers and holders of the 1985 Series B Bonds from time to
time outstanding that, as long as any of the 1985 Series B Bonds remain
outstanding, moneys on deposit in any fund or account in connection with the
1985 Series B Bonds, whether such moneys were derived from the proceeds of the
sale of the 1985 Series B Bonds or from any other sources, will not be used and
the Project will not be used in a manner which would cause the 1985 Series B
Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the Code,
as amended, or "federally-guaranteed bonds" within the meaning of Section 103(h)
of the Code, as amended, and any regulations promulgated or proposed thereunder,
and the Company and the Issuer further covenant to comply with the requirements
of said Section 103(c) or Section 103(h).
SECTION 3.7. ISSUANCE OF ADDITIONAL BONDS. If the Company is not in
default hereunder, the Issuer may by the adoption of an appropriate resolution
or resolutions, at the request of the Company, authorize the issuance of
Additional Bonds upon the terms and conditions provided herein and in Section
2.02 of the Indenture, but in no event shall the Issuer be liable for not
issuing such Additional Bonds. Additional Bonds may be issued under and secured
by the Indenture at one time or from time to time subject to the conditions
hereinafter provided in this Section, for the purpose of providing funds for
paying all or any portion of the cost of completing the Project in excess of the
amounts made available from proceeds of the 1985 Series B Bonds, such total cost
to be evidenced by a certificate signed by the Authorized Company
Representative, or for the purpose of paying all or any part of the Cost of the
Project or of any improvements thereto or for the purpose of
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providing funds for refunding any or all of the Bonds then outstanding including
any redemption premium due thereon, or for any lawful purposes under the Act, or
for any combination of such purposes. Prior to the issuance of such Additional
Bonds, the terms thereof, the purchase price to be paid therefor and the manner
in which the proceeds therefrom are to be disbursed shall have been approved in
writing by the Company; the Company and the Issuer shall have entered into an
amendment to this Agreement to provide that, for all purposes of this Agreement,
the Project shall include any facilities being financed by the Additional Bonds,
which facilities shall be described in an amendment to Exhibit A hereto, and to
provide for an increase in the amount payable under Section 4.2 hereof as shall
be necessary to pay the principal of, premium, if any, and interest on the
Additional Bonds as provided in the supplemental indenture to be paid with
respect to Additional Bonds authorized by Section 2.02 of the Indenture, and to
extend the term of this Agreement if the maturity of any of the Additional Bonds
would otherwise occur after the expiration of the term of this Agreement; and
the Issuer shall have otherwise complied with the provisions of Section 2.02 of
the Indenture with respect to the issuance of such Additional Bonds.
SECTION 3.8. REBATE OF ARBITRAGE TO THE UNITED STATES.
(a) The Company represents and covenants that prior to June 1 of each
year (other than June 1, 1985), and upon retirement of the last 1985 Series B
Bond, the Company shall file with the Internal Revenue Service (and provide the
Trustee and the Issuer with a copy of), a statement of arbitrage earned on any
gross proceeds of the 1985 Series B Bonds, within the meaning of Section
103(c)(6) of the Code, unless prior to such date the Company provides the
Trustee and the Issuer with an opinion of Bond Counsel that such filing is not
required.
(b) Prior to June 29 of the fifth, tenth, fifteenth, twentieth and
twenty-fifth years succeeding the date of issuance of the 1985 Series B Bonds,
to the extent any 1985 Series B Bond is outstanding on such date, and, in any
event, not later than 30 days after the retirement of the last 1985 Series B
Bond, the Company shall, from corporate or other appropriate funds, pay to the
United States, on behalf of the Issuer, an amount which is at least 90% of the
amount required to be paid to the United States pursuant to Section
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103(c)(6)(D) of the Code (the "Rebate Amount") for the five-year period ending
on the May 31 immediately preceding such payment.
(c) On or prior to June 29 of each year referred to in subsection (b),
the Company shall deliver to the Trustee and the Issuer, a certificate of Bond
Counsel to the effect that either (1) the Rebate Amount has been timely paid to
the United States; or (2) that the Rebate Amount is zero.
ARTICLE IV
LEASE AND SUBLEASE OF PROJECT; PAYMENT PROVISIONS
SECTION 4.1. LEASE AND SUBLEASE OF PROJECT.
(a) The Company leases to the Issuer, and the Issuer leases from the
Company, subject to the terms and conditions of this Agreement, and for rental
in an amount equal to the proceeds received by the Issuer from the sale of the
1985 Series B Bonds, all right, title and interest of the Company in and to the
Project (the "Lease").
(b) The Issuer hereby subleases to the Company, and the Company hereby
subleases from the Issuer, upon the terms and conditions of this Agreement, all
right, title, and interest in and to the Project which the Issuer has leased
from the Company pursuant to Section 4.1(a), for the Rental Payments .(as
defined in Section 4.2) (the "Sublease").
SECTION 4.2. RENTAL PAYMENTS AND PAYMENT OF OTHER AMOUNTS PAYABLE.
(a) The Company covenants and agrees to pay or provide for payment in
Available Moneys to the Trustee as Rental Payments on the Sublease to the
Company of the Project pursuant to Section 4.1(b) hereof, on or before each date
provided in or pursuant to the Indenture for the payment of principal (whether
at maturity or upon redemption or acceleration) of, premium, if any, and/or
interest on the 1985 Series B Bonds, until the principal of, premium, if any,
and interest on the Bonds shall have been fully paid or provision for the
payment thereof shall have been made in accordance with the Indenture, in
immediately available funds, for deposit in the Bond Fund, a sum equal to the
amount payable on such
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interest or principal payment or redemption or acceleration date as principal
(whether at maturity or upon redemption or acceleration), premium, if any, and
interest upon the 1985 Series B Bonds as provided in the Indenture.
Each payment pursuant to this Section 4.2(a) shall at all times be
sufficient to pay the total amount of interest and principal (whether at
maturity or upon redemption or acceleration) and premium, if any, payable on the
Bonds on the date on which such principal becomes due (whether at maturity or
upon redemption or acceleration) or on the applicable Interest Payment Date, as
the case may be; provided that any amount of Available Moneys held by the
Trustee in the Bond Fund on any due date for a Rental Payment hereunder shall be
credited against the payment due on such date to the extent available for such
purpose; and provided further that, subject to the provisions of this paragraph,
if at any time Available Moneys held by the Trustee in the Bond Fund are
sufficient to pay all of the principal of and interest and premium, if any, on
the Bonds as such payments become due, the Company shall be relieved of any
obligation to make any further payments under the provisions of this Section.
Notwithstanding the foregoing, if on any date Available Moneys held by the
Trustee in the Bond Fund are insufficient to make any required payments of
principal of (whether at maturity or upon redemption or acceleration) and
interest and premium, if any, on the Bonds as such payments become due, the
Company shall forthwith pay or cause to be paid such deficiency as a Rental
Payment hereunder.
(b) The Company also agrees to pay to the Trustee until the principal
of, premium, if any, and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made as required by the
Indenture, (i) the annual fee of the Trustee for its Ordinary Services rendered
as trustee, and its Ordinary Expenses incurred under the Indenture, as and when
the same become due, (ii) the reasonable fees, charges and expenses of the
Trustee, the Depository Agent, the Registrar, and the reasonable fees of any
Paying Agent on the Bonds as provided in the Indenture, as and when the same
become due, (iii) the reasonable fees, charges and expenses of the Trustee for
the necessary Extraordinary Services rendered by it and Extraordinary Expenses
incurred by it under the Indenture, as and when the same become due, and (iv)
the cost of printing any Bonds required to be furnished by the Issuer at the
expense of the Issuer.
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(c) The Company also agrees to pay, within 60 days after receipt of
request for payment thereof, all reasonable expenses required to be paid by the
Company under the terms of the Bond Purchase Agreement executed by it in
connection with the sale of the Bonds, and all reasonable expenses of the Issuer
related to the Project which are not otherwise required to be paid by the
Company under the terms of this Agreement; provided that the Issuer shall have
obtained the prior written approval of the Authorized Company Representative for
any expenditures other than those provided for herein or in said Bond Purchase
Agreement.
(d) In the event the Company should fail to make any of the payments
required by subsection (a)-(c), (e) and (f) of this Section, such payments shall
continue as obligations of the Company until such amounts shall have been fully
paid. The Company agrees to pay such amounts, together with interest thereon
until paid, to the extent permitted by law, at the rate of ten percent (10%) per
annum.
(e) The Company agrees to pay to the Remarketing Agent the reasonable
fees, charges and expenses of such Remarketing Agent.
(f) The Company agrees to pay to the Issuer the reasonable fees,
charges and expenses of such Issuer.
SECTION 4.3. UNCONDITIONAL OBLIGATION. The obligations of the Company
to make the payments required by Section 4.2 hereof and to perform and observe
the other agreements on its part contained herein shall be absolute and
unconditional, irrespective of any defense or any rights of set off, recoupment
or counterclaim it might otherwise have against the Issuer, and during the term
of this Agreement, the Company shall pay the payments to be made as prescribed
in Section 4.2 and all other payments required hereunder, free of any deductions
and without abatement, diminution or set-off. Until such time as the principal
of, premium, if any, sinking fund installments, if any, and interest on the
Bonds shall have been fully paid, or provision for the payment thereof shall
have been made as required by the Indenture, the Company (i) will not suspend or
discontinue any payments provided for in Section 4.2 hereof; (ii) will perform
and observe all of its other covenants contained in this Agreement; and (iii)
except as provided in Section 9.7 hereof, will not terminate this
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Agreement for any cause, including, without limitation, failure to complete the
Project, the occurrence of any act or circumstances that may constitute failure
of consideration, destruction of or damage to the Project, commercial
frustration of purpose, any change in the a tax or other laws of the United
States of America or of the State of Oregon or any political subdivision or
either of these, or any failure of the Issuer or the Trustee to perform and
observe any covenant, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Agreement or the Indenture,
except to the extent permitted by this Agreement.
SECTION 4.4. ASSIGNMENT OF ISSUER'S RIGHTS. As security for the
payment of the Bonds, the Issuer will assign to the Trustee the Issuer's rights
under this Agreement, including the right to receive payments hereunder (except
the right of the Issuer to receive certain payments, if any, with respect to
expenses and indemnification under Sections 4.2(c) and (f), 6.3, 8.2 and 8.3
hereof), and the Issuer hereby directs the Company to make the payments required
hereunder (except such payments for expenses and indemnification) directly to
the Trustee. The Company hereby assents to such assignment and agrees to make
payments directly to the Trustee without defense or set-off by reason of any
dispute between the Company and the Issuer or the Company and the Trustee.
SECTION 4.5. LETTER OF CREDIT. (a) The Company shall arrange for a
Letter of Credit and may, at its option, arrange for a Substitute Letter of
Credit to be in effect with such terms and conditions as required under Section
5.06(b) of the Indenture. Any Substitute Letter of Credit to be effective upon
the termination of the Letter of Credit or anv extension of the Letter of Credit
shall be delivered to the Trustee at least 60 days prior to the date upon which
the Letter of Credit terminates according to its terms, and the terms of the
Indenture.
(b) On any Interest Payment Date, the Company may, at its option,
provide for the delivery to the Trustee of a Substitute Letter of Credit
relating to the 1985 Series B Bonds. Such Substitute Letter of Credit shall be
an irrevocable letter of credit with a term of at least one year, issued by a
commercial bank, the terms of which shall in all material respects be the same
as the Letter of Credit except that the termination date of such Substitute
Letter of Credit
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may be later than June 19, 1992. On or prior to the date of delivery of a
Substitute Letter of Credit to the Trustee, the Company shall furnish to the
Trustee (i) an opinion of Bond Counsel stating that the delivery of such
Substitute Letter of Credit to the Trustee is lawful under applicable law and
permitted under this Agreement and complies with the terms hereof and that the
delivery of such Substitute Letter of Credit does not adversely affect the
exemption from federal income taxation of interest on any of the 1985 Series B
Bonds and (ii) written evidence from Moody's, if the 1985 Series B Bonds are
rated by Moody's, and S&P, if the 1985 Series B Bonds are rated by S&P, in each
case to the effect that such rating agency has reviewed the proposed Substitute
Letter of Credit and that the substitution of the proposed Substitute Letter of
Credit for the Letter of Credit will not, by itself, result in a reduction or
withdrawal of its ratings of the 1985 Series B Bonds from those which then
prevail.
(c) The Company may, at its option, provide for the delivery to the
Trustee of an Alternate Credit Facility as described in the next succeeding
sentence. "Alternate Credit Facility" means (i) a letter of credit which does
not conform to the requirements for a Substitute Letter of Credit, sufficient in
amount to pay, and bearing terms sufficient to provide for the payment of, the
principal of, and premium, if any, and interest on all 1985 Series B Bonds
remaining Outstanding upon the effective date thereof or (ii) such other credit
facility as the Company shall select to evidence or secure the Company's
obligation under the Agreement; provided that in any such case the
administrative provisions of such Alternate Credit Facility are reasonably
satisfactory to the Trustee. On or prior to the date of delivery of any
Alternate Credit Facility to the Trustee, the Company shall furnish to the
Trustee and the Issuer an opinion of Bond Counsel stating that the delivery of
such Alternate Credit Facility to the Trustee is lawful under applicable law and
permitted under this Agreement and complies with the terms hereof and that the
delivery of such Alternate Credit Facility will not adversely affect the
exemption from federal income taxation of the interest on the 1985 Series B
Bonds, and, at the Company's option, written evidence from one or more rating
agencies as described in Section 5.07 of the Indenture.
(d) Not less than 45 days prior to the effective date of an Alternate
Credit Facility the Company shall provide
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notice to the Issuer, the Trustee, and the Remarketing Agent identifying the
Alternate Credit Facility to be delivered to the Trustee, the effective date of
such Alternate Credit Facility, and specifying the rating, if any, expected to
be assigned to the 1985 Series B Bonds after the effective date of such
Alternate Credit Facility.
(e) The Company agrees from the date of the initial authentication and
delivery of the 1985 Series B Bonds to and including the earliest of (i) the
honoring by the Credit Bank of the last drawing available to be made under the
Letter of Credit; (ii) June 19, 1992 or such later date as may result from any
extension thereof; (iii) the date on which the principal amount of and interest
on the 1985 Series B Bonds shall be paid in full or deemed paid in full pursuant
to Article X of the Indenture; and (iv) the Optional Termination Date, the
Company shall provide for the payment of the principal of and interest on, or
the purchase price of 1985 Series B Bonds as provided in Section 4.01(b)(iii) of
the Indenture upon redemption or acceleration or as may otherwise be due and
payable, by the delivery to the Trustee simultaneously with the original
authentication and delivery of the 1985 Series B Bonds of a Letter of Credit
complying with the provisions of this Section 4.5. The Company hereby authorizes
the Trustee to draw moneys under the Letter of Credit in accordance with the
provisions of the Indenture to the extent necessary to pay the principal or
purchase price of and interest on the 1985 Series B Bonds if and when due.
SECTION 4.6. AMOUNTS REMAINING IN FUNDS. It is agreed by the parties
hereto that after payment in full of (i) the Bonds, or after provision for such
payment shall have been made as provided in the Indenture, (ii) the fees,
charges and expenses of the Trustee, the Depository Agent and paying agents in
accordance with the Indenture and (iii) all other amounts required to be paid
under this Agreement and the Indenture, any amounts remaining in any fund held
by the Trustee under the Indenture shall belong, subject to the requirements of
Section 5.09 of the Indenture, to the Company and be paid to the Company by the
Trustee.
SECTION 4.7. QUIET ENJOYMENT.
(a) The Company will not take any action, other than pursuant to
Section 5.1 or Article VI hereof, to prevent the
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Issuer from having quiet and peaceable possession and enjoyment of the Project
during the terms of the Lease and will, at the request of the Issuer and at the
Company's cost, cooperate with the Issuer in order that the Issuer may have
quiet and peaceable possession and enjoyment of the Project.
(b) The Issuer will maintain the Lease in full force and effect in
accordance with its terms, and will not take any action, other than pursuant to
Section 5.1 hereof, to prevent the Company from having quiet and peaceable
possession and enjoyment of the Project during the term of the Sublease and
will, at the request of the Company and at the Company's cost, cooperate with
the Company in order that the Company may have quiet and peaceable possession
and enjoyment of the Project.
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. RIGHT OF ACCESS TO THE PROJECT. The Company agrees that
during the term of this Agreement the Issuer, the Trustee and the duly
authorized agents of either of them shall have the right at all reasonable times
during normal business hours to enter upon the site of the Project to examine
and inspect the Project; provided, however, that this right is subject to
federal and State of Oregon laws and the rules and regulations applicable to the
Facility. The rights of access hereby reserved to the Issuer and the Trustee may
be exercised only after such agent shall have executed release of liability and
secrecy agreements if requested by the Company in the form then currently used
by the Company, and nothing contained in this Section or in any other provision
of this Agreement shall be construed to entitle the Issuer or the Trustee to any
information or inspection involving the confidential know-how of the Company.
SECTION 5.2.THE COMPANY MAINTENANCE OF ITS EXISTENCE; ASSIGNMENTS.
(a) To the extent permitted by law and its Articles of Incorporation,
the Company agrees that during the term of this Agreement it will maintain its
existence as a corporation, will continue to maintain its status as a
corporation in good standing in the State of Oregon, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
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combine or consolidate with or merge into another person or permit one or more
persons to consolidate with or merge into it; provided, however, that the
Company may so combine, consolidate with, or merge into another person legally
existing under the laws of one of the states of the United States, or permit one
or more persons to consolidate with or merge into it, or sell or otherwise
transfer to another person all or substantially all of its assets as an entity
and thereafter dissolve, provided that: (i) the surviving, resulting, or
transferee person, as the case may be, assumes and agrees in writing to pay and
perform all of the obligations of the Company hereunder, (ii) the surviving,
resulting, or transferee person, as the case may be, qualifies to do business in
the State of Oregon, (iii) the surviving, resulting, or transferee person, as
the case may be, has a net worth (as determined in accordance with generally
accepted accounting principles) at least equal to the net worth of the Company
at the end of the fiscal quarter immediately preceding the effective date of
such consolidation, merger, sale or transfer, and (iv) (1) if a Letter of Credit
is in effect, the credit rating on the Bonds, as determined by Moody's or S&P,
shall remain at substantially the same level as the rating of the Bonds
immediately prior to the effective date of such consolidation, merger, sale or
transfer, or (2) if first mortgage bonds of the Company have been provided
pursuant to the Alternate Credit Facility arrangement, the Company provides
copies of such instruments as may be required under the mortgage bond indenture
for the resulting or transferee corporation to assume the due and punctual
payment of the principal and interest on the outstanding Bonds and the due and
punctual performance of all of the covenants and conditions which may be
required under the mortgage bond indenture. The Company may dispose of all or
substantially all of its assets or combine or consolidate with or merge into
another person other than as provided in (i) through (iv) above if the Company
has obtained the prior written consent of the Issuer and the holders of at least
66 2/3% in aggregate principal amount of Outstanding 1985 Series B Bonds (and
the Credit Bank during any period the Letter of Credit is outstanding). Said
consent, with respect to the Issuer (or Credit Bank) shall be given or denied
within 30 days after the Issuer (or the Credit Bank) receives the Company's
written request for said approval. If the Issuer (or Credit Bank) does not act
within 30 days after such written request is received,-such consent shall be
deemed to be given.
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Notwithstanding any other provisions of this Section 5.2(a), the
Company need not comply with any of the provisions of Section 5.2(a) above if,
at the time of such merger, combination, sale of assets, dissolution or
reorganization, the Bonds will be defeased as provided in Article X of the
Indenture.
(b) The rights and obligations of the Company under this Agreement may
be assigned by the Company to any person in whole or in part, subject, however,
to each of the following conditions:
(i) No assignment other than pursuant to subsection (a) of this
Section shall relieve the Company from primary liability for any of its
obligations hereunder, and in the event of any assignment not pursuant to
subsection (a) of this Section the Company shall continue to remain primarily
liable for the payments specified in Section 4.2 hereof and for performance and
observance of the other agreements on its part herein provided to be performed
and observed by it.
(ii) Any assignment from the Company shall retain for the Company
such rights and interests as will permit it to perform its obligations under
this Agreement, and any assignee from the Company shall assume in writing the
obligations of the Company hereunder to the extent of the interest assigned.
(iii) The Company shall, within thirty days after delivery
thereof, furnish or cause to be furnished to the Issuer and the Trustee a true
and complete copy of each such assignment together with an instrument of
assumption.
SECTION 5.3. RECORDS AND FINANCIAL STATEMENTS OF COMPANY. The Company
shall, within 120 days after the close of each fiscal year, submit to the Issuer
and to the Trustee financial statements with respect to the Company for such
fiscal year. The Trustee's only responsibility with respect to such financial
statements shall be to make said financial statements available for inspection
by bondholders upon reasonable notice at the Principal Office of the Trustee.
The Trustee shall be permitted at all reasonable times during the term of this
Agreement to examine the books and records of the Company with respect to the
Project, subject to the limitations expressed in Section 5.1.
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SECTION 5.4. MAINTENANCE AND REPAIR; TAXES; UTILITY AND OTHER CHARGES.
The Company agrees to maintain the Project, or cause the Project to be
maintained, during the term of this Agreement (i) in as reasonably safe
condition as its operations shall permit and (ii) in good repair and in good
operating condition, ordinary wear and tear excepted, making from time to time
all necessary repairs thereto and renewals and replacements thereof.
The Company agrees to pay or cause to be paid during the term of this
Agreement all taxes, governmental charges of any kind lawfully assessed or
levied upon the Project or any part thereof, including any taxes levied against
the Project which, if not paid, will become a charge on the receipts from the
Project prior to or on a parity with the charge thereon and the pledge or
assignment thereof to be created therefrom or under this Agreement, all utility
and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Project and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a lien on the
Project, provided that with respect to special assessments or other governmental
charges that may lawfully be paid in installments over a period of years, the
Company shall be obligated to pay only such installments as are required to be
paid during the term of this Agreement. The Company may, at the Company's
expense and in the Company's name, in good faith, contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments or other charges so contested to remain unpaid during
that period of such contest and any appeal therefrom unless by such nonpayment
the Project or any part thereof will be subject to loss or forfeiture.
SECTION 5.5. QUALIFICATION IN OREGON. The Company agrees that
throughout the term of this Agreement it, or any successor or assignee as
permitted by Section 5.2, will be qualified to do business in the State of
Oregon.
SECTION 5.6. TAX EXEMPT STATUS OF 1985 SERIES B BONDS. It is the
intention of the parties hereto that interest on the 1985 Series B Bonds shall
be and remain exempt from federal income taxation, and to that end the covenants
and agreements of the Issuer and the Company in this Section are for the benefit
of the Trustee and each and every holder of the 1985 Series B Bonds.
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The Company represents and warrants that substantially all of the
proceeds of the 1985 Series B Bonds are to be used with respect to the Project
as more specifically set forth in the Engineering Certificate.
The Issuer covenants and agrees that it has not taken and will not
take any action which results in interest paid on the 1985 Series B Bonds being
included in the federal gross income of the holders of the 1985 Series B Bonds
for purposes of federal income taxation; and the Company covenants and agrees
that it has not taken or authorized and will not take or authorize any action
which will cause the interest on the 1985 Series B Bonds to become subject to
federal income taxation pursuant to the provisions of Section 103(b) of the
Code; provided that neither the Company nor the Issuer shall have violated these
covenants if the interest on any of the 1985 Series B Bonds becomes taxable to a
person solely because such person is a "substantial user" of the Project or a
"related person" within the meaning of Section 103 of the Code; and provided
further that none of the covenants and agreements herein contained shall require
either the Company or the Issuer to enter an appearance or intervene in any
administrative, legislative or judicial proceeding in connection with any
changes in applicable laws, rules or regulations or in connection with any
decisions of any court or administrative agency or other governmental body
affecting the taxation of interest on the 1985 Series B Bonds.
SECTION 5.7. NOTICE OF INTEREST RATE PERIODS. The Company shall
designate and give timely written notice to the Trustee and the Issuer as
required by Section 2.01(b)(ii) of the Indenture prior to any change in Interest
Rate Periods. In addition, if the Company shall elect to change Interest Rate
Periods, the Company shall deliver to the Trustee and the Issuer concurrently
with the giving of notice with respect thereto, and no such change shall be
effective without, an opinion of Bond Counsel, if required by the Indenture, to
the effect that such change is in accordance with the Indenture and is not
prohibited under the Act and will not adversely affect the exemption from
federal income taxation of the interest on the Bonds.
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. Any one of the following which occurs
and continues shall constitute an Event of Default:
(a) failure by the Company to pay any amounts required to be paid
under Section 4.2(a) hereof which failure results in an event of default under
subsections (a) or (b) of Section 7.01 of the Indenture either immediately or
after the expiration of any applicable grace period; or
(b) failure of the Company to observe and perform any covenant,
condition or agreement on its part required to be observed or performed by this
Agreement, other than making the payments referred to in (a) above, which
continues for a period of 30 days after written notice, which notice shall
specify such failure and request that it be remedied, given to the Company by
the Issuer or the Trustee, unless the Issuer and the Trustee shall agree in
writing to an extension of such time; provided, however, that if the failure
stated in the notice cannot be corrected within such period, the Issuer and the
Trustee will not unreasonably withhold their consent to an extension of such
time if corrective action is instituted within such period and diligently
pursued until the default is corrected; or
(c) when any Alternate Credit Facility is in effect, default by the
Company under such Alternate Credit Facility; or
(d) an Act of Bankruptcy of the Company; or
(e) the occurrence of an "Event of Default" under Section 7.01(e) of
the Indenture.
The provisions of subsection (b) of this Section are subject to the limitation
that the Company shall not be deemed in default if and so long as the Company is
unable to carry out its agreements hereunder by reason of strikes, lockouts or
other industrial disturbances; acts of public enemies; orders of any kind of the
government of the United States or of the State of Oregon or any of their
departments, agencies, or officials, or
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any civil or military authority; insurrections, riots, epidemics, landslides;
lightning; earthquake; fire; hurricanes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances; explosions;
breakage or accident to machinery, transmission facilities; partial or entire
failure of utilities; or any other cause or event not reasonably within the
control of the Company; it being agreed that the settlement of strikes, lockout
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. This limitation shall not apply to any default under
subsections (a), (c), (d) or (e) of this Section.
SECTION 6.2. REMEDIES ON DEFAULT. Whenever any Event of Default shall
have occurred and shall continue,
(a) The Trustee, by written notice to the Company, shall declare the
amounts payable under Section 4.2(a) of this Agreement to be immediately due and
payable as set forth in Section 7.01 of the Indenture.
(b) The Trustee may have access to and may inspect, examine and make
copies of the books and records and any and all accounts, data and federal
income tax and other tax returns of the Company, subject to the limitations
provided in Section 5.1.
(c) The Issuer or the Trustee may take whatever action at law or in
equity as may be necessary or desirable to collect the payments and other
amounts then due and thereafter to become due or to enforce performance and
observance of any obligation, agreement or covenant of the Company under this
Agreement.
(d) The Trustee shall draw upon the Letter of Credit or any Substitute
Letter of Credit or any Alternate Credit Facility if permitted by its terms and
required by the terms of the Indenture, and may exercise any remedy available to
it.
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In case the Trustee or the Issuer shall have proceeded to enforce its
rights under this Agreement and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Trustee
or the Issuer, then, and in every such case, the Company, the Trustee and the
Issuer shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company, the Trustee and
the Issuer shall continue as though no such action had been taken.
The Company covenants that, in case an Event of Default shall occur
with respect to the payment of any Rental Payment payable under Section 4.2(a)
hereof, then, upon demand of the Trustee, the Company will pay or cause to be
paid to the Trustee the whole amount that then shall have become due and payable
under said Section, with interest, to the extent permitted by law, on the amount
then overdue at the rate of ten percent (10%) per annum until such amount has
been paid.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee shall be entitled and empowered to institute any action or
proceeding at law or in equity for the collection of the sums so due and unpaid,
and may prosecute any such action or proceeding to judgment or final decree, and
may enforce any such judgment or final decree against the Company and collect in
the manner provided by law the moneys adjudged or decreed to be payable.
In case proceedings shall be pending for the bankruptcy or for the
reorganization of the Company under the federal bankruptcy laws or any other
applicable law, or in case a receiver or trustee shall have been appointed for
the property of the Company or in the case of any other similar judicial
proceedings relative to the Company, or the creditors or property of the
Company, then the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid pursuant to this Agreement and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee allowed in
such judicial proceedings relative to the Company, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute such amounts as provided in
the Indenture after the
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deduction of its charges and expenses. Any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized to make such payments to the
Trustee, and to pay to the Trustee any amount due it for compensation and
expenses, including expenses and fees of counsel incurred by it up to the date
of such distribution.
SECTION 6.3. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In the
event the Company should default under any of the provisions of this Agreement
and the Issuer or the Trustee should employ attorneys or incur other expenses
for the collection of the payments due under this Agreement or the enforcement
of performance or observance of any obligation or agreement on the part of the
Company herein contained, the Company agrees to pay to the Issuer or the Trustee
the reasonable fees of such attorneys and such other expenses so incurred by the
Issuer or the Trustee.
SECTION 6.4. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer or the Trustee 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 under this Agreement or now
or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Issuer or the Trustee to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required. Such rights and
remedies as are given the Issuer hereunder shall also extend to the Trustee, and
the Trustee and the holders of the Bonds shall be deemed third party
beneficiaries of all covenants and agreements herein contained.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event
any agreement or covenant contained in this Agreement should be breached by the
Company and thereafter waived by the Issuer or the Trustee, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder.
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ARTICLE VII
PREPAYMENT
SECTION 7.1. REDEMPTION OF BONDS WITH PREPAYMENT MONEYS. By virtue of
the assignment of the rights of the Issuer under this Agreement to the Trustee
as is provided in Section 4.4 hereof, the Company agrees to and shall pay
directly to the Trustee any amount permitted or required to be paid by it under
this Article VII. The Trustee shall use the moneys so paid to it by the Company
to redeem the Bonds on the date set for such redemption pursuant to Section 7.5
hereof.
SECTION 7.2. OPTIONAL PREPAYMENT. The Company shall have the option to
prepay the amounts payable under Section 4.2 hereof with respect to the 1985
Series B Bonds, by paying or providing for payment to the Trustee, for deposit
in the appropriate account of the Bond Fund, the amount in Available Moneys set
forth in Section 7.4 hereof, under circumstances set forth in Section 4.01(b)(i)
of the Indenture.
SECTION 7.3. MANDATORY PREPAYMENT. The Company shall have and hereby
accepts the obligation to prepay or provide for prepayment in Available Moneys
Rental Payments with respect to the 1985 Series B Bonds to the extent mandatory
redemption of the 1985 Series B Bonds is required pursuant to Section
4.01(b)(ii) of the Indenture and upon the occurrence of any of the following
events:
(i) as a result of any changes in the Constitution of the State of
Oregon or in the Constitution of the United States of America or of legislative
or administrative action (whether state or federal), or by final decree,
judgment or order of any court or administrative body (whether state or federal)
entered after the contest thereof by the Company in good faith, this Agreement
shall have become impossible of performance in accordance with the intent and
purposes of the parties as expressed in this Agreement;
(ii) all or substantially all of the properties of the Company shall
be sold or taken through the exercise of the right of eminent domain or the
right to purchase by any municipal or governmental body or agency; or
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(iii) a Determination of Taxability.
In the case of any of the events stated in (i), (ii) or (iii) of this
Section 7.3, the Company must satisfy its obligation by prepaying within 90 days
after such event.
The amount payable by the Company in the event of a prepayment
required by this Section shall be determined as set forth in Section 7.4 and
shall be deposited in the Bond Fund.
SECTION 7.4. AMOUNT OF PREPAYMENT. In the case of a prepayment of the
entire amount due hereunder pursuant to Section 7.2 or 7.3 hereof, the amount to
be paid shall be a sum sufficient, together with other funds and any securities
deposited with the Trustee and available for such purpose, to pay (1) in
Available Moneys the principal of all Bonds outstanding on the redemption date
specified in the notice of redemption, plus interest accrued and to accrue to
the payment or redemption date of the Bonds, plus premium, if any, pursuant to
the Indenture, (2) all reasonable and necessary fees and expenses of the Issuer,
the Trustee, the Depository Agent and any paying agent accrued and to accrue
through final payment of the Bonds, and (3) all other liabilities of the Company
accrued and to accrue under this Agreement.
In the case of partial prepayment of the Rental Payments, the amount
payable shall be a sum sufficient, together with other funds deposited with the
Trustee and available for such purpose, to pay in Available Moneys the principal
amount of and premium, if any, and accrued interest on the Bonds to be redeemed,
as provided in the Indenture, and to pay expenses of redemption of such Bonds.
SECTION 7.5. NOTICE OF PREPAYMENT. To exercise an option granted in or
to perform an obligation required by this Article VII (other than an obligation
to make Rental Payments with respect to a mandatory redemption of 1985 Series B
Bonds pursuant to Section 4.01(b)(ii)(B)(1)(c) or (e) of the Indenture), the
Company shall, at least 45 days prior to the date of any prepayment, give
written notice to the Issuer and the Trustee specifying the date upon which any
prepayment will be made, (which date shall be the date of redemption of the
Bonds contemplated by such option or obligation), the redemption premium, if any
and the principal amount of any such redemption. If the Company fails to give
such notice of a
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prepayment required by this Section 7.5, such notice may be given by the Issuer,
by the Trustee or by any holder or holders of 10% or more in aggregate principal
amount of the Bonds outstanding. The Issuer and the Trustee, at the request of
the Company or any such Bondholder, shall forthwith take all steps necessary
under the applicable provisions of the Indenture (except that neither the Issuer
nor the Trustee shall be required to make payment of any money required for such
redemption except from Revenues) to effect redemption of all or part of the then
outstanding Bonds, as the case may be, on the earliest practicable date
thereafter on which such redemption may be made under applicable provisions of
the Indenture.
ARTICLE VIII.
NON-LIABILITY OF ISSUER; EXPENSES; INDEMNIFICATION
SECTION 8.1. NON-LIABILITY OF ISSUER. The Issuer shall not be
obligated to pay the principal of, or premium, if any, or interest on the Bonds,
except from Revenues. The Company hereby acknowledges that the Issuer's sole
source of moneys to repay the Bonds will be provided by the payments made by the
Company pursuant to this Agreement, together with other Revenues, including
investment income on certain funds and accounts held by the Trustee under the
Indenture, and hereby agrees that if the payments to be made hereunder shall
ever prove insufficient to pay all principal of, and premium, if any, and
interest on the Bonds as the same shall become due (whether by maturity,
redemption, acceleration or otherwise), then upon notice from the Trustee, the
Company shall pay such amounts as are required from time to time to makeup any
deficiency or default in the payment of such principal, premium or interest,
including, but not limited to, any deficiency caused by acts, omissions,
nonfeasance or malfeasance on the part of the Trustee, the Company, the Issuer
or any third party. Provided, however, that such payment shall not constitute a
waiver of any right or remedy which the Company may possess to recover such
payment from any party whose acts, omissions, nonfeasance or malfeasance has
caused or contributed to such deficiency.
SECTION 8.2. EXPENSES. The Company covenants and agrees to pay and to
indemnify the Issuer, the Trustee and the Depository Agent against all costs and
charges, including reasonable fees and disbursements of attorneys, accountants,
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consultants and other experts (including such fees and costs at trial or on
appeal), incurred in good faith in connection with this Agreement, the Bonds or
the Indenture.
SECTION 8.3. INDEMNIFICATION. The Company releases the Issuer and the
Trustee from, and covenants and agrees that neither the Issuer nor the Trustee
shall be liable for, and covenants and agrees, to the extent permitted by law,
to indemnify and hold harmless the Issuer and the Trustee and their officers,
employees and agents from and against, any and all losses, claims, damages,
liabilities or expenses, of every conceivable kind, character and nature
whatsoever arising out of, resulting from or in any way connected with (1) the
Project, or the conditions, occupancy, use, possession, conduct or management
of, or work done in or about, or from the planning, design, acquisition,
installation or construction of the Project or any part thereof; (2) the
issuance of any Bonds or any certifications or representations made in
connection therewith and the carrying out of any of the transactions
contemplated by the Bonds and this Agreement; (3) the Trustee's acceptance or
administration of the trusts under the Indenture, or the exercise or performance
of any of its powers or duties under the Indenture; or (4) any untrue statement
or alleged untrue statement of any material fact or omission or alleged omission
to state a material fact necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in any official
statement or other offering circular utilized by the Issuer or any underwriter
or placement agent in connection with the sale of any Bonds; provided that such
indemnity shall not be required for damages, losses, claims, liabilities or
expenses of any conceivable kind, nature or character, that result from
negligence or willful misconduct on the part of the party seeking such
indemnity. The Company further covenants and agrees, to the extent permitted by
law, to pay or to reimburse the Issuer and the Trustee and their officers,
employees and agents for any and all costs, reasonable attorneys fees (including
such fees and costs at trial or on appeal), liabilities or expenses incurred in
connection with investigating, defending against or otherwise in connection with
any such losses, claims, damages, liabilities, expenses or actions, except to
the extent that the same arise out of the negligence or willful misconduct of
the party claiming such payment or reimbursement. The provisions of this Section
shall survive the retirement of the Bonds.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1. NOTICES. All notices, certificates or other
communications shall be deemed sufficiently given on the day on which the same
have been mailed by certified mail, postage prepaid, addressed to the Issuer,
the Company, the Trustee or the Credit Bank, as the case may be, as follows:
To the Issuer: ▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Port Manager
To the Company: Portland General Eleetric Company
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
To the Trustee: Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trustee Administration
Department
To the Credit Bank: The Long-Term Credit Bank of Japan, Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: U.S. Corporate Business Section
A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Company to the other shall also be given
to the Trustee. The Issuer, the Company, the Trustee and the Credit Bank may, by
notice given hereunder, designate any different addresses to which subsequent
notices, certificates or other communications shall be sent.
SECTION 9.2. SEVERABILITY. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
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SECTION 9.3. EXECUTION OF COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument;
provided, however, that for purposes of perfecting a security interest in this
Agreement on behalf of the Trustee under Article 9 of the Oregon Uniform
Commercial Code, only the counterpart delivered, pledged, and assigned to the
Trustee shall be deemed the original.
SECTION 9.4. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as
otherwise provided in this Agreement or the Indenture, subsequent to the initial
issuance of Bonds and prior to their payment in full, or provision for such
payment having been made as provided in the Indenture, this Agreement may not be
effectively amended, changed, modified, altered or terminated without the
written consent of the Trustee and the Credit Bank, if any.
SECTION 9.5. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the State
of Oregon.
SECTION 9.6. AUTHORIZED COMPANY REPRESENTATIVE. Whenever under the
provisions of this Agreement or the Indenture the approval of the Company is
required or the Company is required to take some action at the request of the
Issuer, such approval or such request shall be given on behalf of the Company by
the Authorized Company Representative, and the Issuer and the Trustee shall be
authorized to act on any such approval or request and neither party hereto shall
have any complaint against the other or against the Trustee as a result of any
such action taken.
SECTION 9.7. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from the date hereof and shall continue in effect as long as
any of the Bonds are outstanding or the Trustee holds any moneys under the
Indenture, whichever is later. All representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds shall
survive the termination of this Agreement.
SECTION 9.8. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer,
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the Company and their respective successors and assigns; subject, however, to
the limitations contained in Section 5.2 hereof.
IN WITNESS WHEREOF, the Port of St. Helens, Oregon has caused this
Agreement to be executed in its name and its seal to be hereunto affixed and
attested by its duly authorized officers, and Portland General Electric Company
has caused this Agreement to be executed in its name by its duly authorized
officer , all as of the date first above written.
▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
By /s/ [illegible]
------------------------------
Attest:
/s/ [illegible]
---------------------------
PORTLAND GENERAL ELECTRIC COMPANY
By /s/ [illegible]
------------------------------
Attest:
__________________________
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Exhibit A
The Project to be financed by the Bonds consists of Portland General
Electric Company's 67.5% share of the cost of constructing certain pollution
control and solid waste disposal facilities at the Trojan Nuclear Power Plant.
The facilities are as follows:
Solid Radwaste Facility
Gaseous Radwaste Facility
Liquid Radwaste Facility
Cooling Water Facility
Interest During Construction
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