LOAN AGREEMENT
between
CITY OF PRINCETON, INDIANA
and
PSI ENERGY, INC.
_______________________________
$35,000,000
City of Princeton, Indiana
Pollution Control
Revenue Refunding Bonds, 1997 Series
(PSI Energy, Inc. Project)
_______________________________
Dated
as of
February 1, 1997
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 2
Section 1.1. Use of Defined Terms 2
Section 1.2. Definitions 2
Section 1.3. Interpretation 7
Section 1.4. Captions and Headings 8
ARTICLE II REPRESENTATIONS 9
Section 2.1. Representations of the Issuer 9
Section 2.2. No Warranty by Issuer of Condition or
Suitability of the Project 9
Section 2.3. Representations and Covenants of the
Company 9
ARTICLE III COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS 13
Section 3.1. Acquisition, Construction and
Installation 13
Section 3.2. Project Description 13
Section 3.3. Issuance of the Bonds; Application of
Proceeds 13
Section 3.4. Investment of Fund Moneys 14
Section 3.5. Rebate Fund 14
ARTICLE IV LOAN BY ISSUER; LOAN
PAYMENTS; ADDITIONAL PAYMENTS; AND
CREDIT FACILITY 15
Section 4.1. Loan Repayment 15
Section 4.2. Additional Payments 15
Section 4.3. Place of Payments 16
Section 4.4. Obligations Unconditional 16
Section 4.5. Assignment of Revenues and Agreement
16
Section 4.6. Credit Facility; Alternate Credit
Facility; Cancellation 16
Section 4.7. Company's Option to Elect Rate Period
17
Section 4.8. Company's Obligation to Purchase Bonds
17
ARTICLE V ADDITIONAL AGREEMENTS AND COVENANTS 18
Section 5.1. Right of Inspection 18
Section 5.2. Maintenance 18
Section 5.3. Removal of Portions of the Project
Facilities 18
Section 5.4. Operation of Project Facilities 18
Section 5.5. Insurance 19
Section 5.6. Workers' Compensation Coverage 19
Section 5.7. Damage; Destruction and Eminent Domain
19
Section 5.8. Company to Maintain its
Corporate Existence; Conditions Under
Which Exceptions Permitted 19
Section 5.9. Indemnification 20
Section 5.10. Company Not to
Adversely Affect Exclusion of Interest
on Bonds From Gross Income For Federal
Income Tax Purposes 21
Section 5.11. Use of Project Facilities 21
Section 5.12. Assignment by Company 21
ARTICLE VI REDEMPTION 23
Section 6.1. Optional Redemption 23
Section 6.2. Extraordinary Optional Redemption 23
Section 6.3. Mandatory Redemption 24
Section 6.4. Notice of Redemption 25
Section 6.5. Actions by Issuer 25
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES 26
Section 7.1. Events of Default 26
Section 7.2. Remedies on Default 27
Section 7.3. No Remedy Exclusive 28
Section 7.4. Agreement to Pay Attorneys' Fees and
Expenses 28
Section 7.5. No Waiver 28
Section 7.6. Notice of Default 28
ARTICLE VIII MISCELLANEOUS 29
Section 8.1. Term of Agreement 29
Section 8.2. Amounts Remaining in Funds 29
Section 8.3. Notices 29
Section 8.4. Extent of Covenants of the Issuer; No
Personal Liability 29
Section 8.5. Binding Effect 30
Section 8.6. Amendments and Supplements 30
Section 8.7. References to Credit Facility 30
Section 8.8. Execution Counterparts 30
Section 8.9. Severability 30
Section 8.10. Governing Law 30
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of February
1, 1997 between the CITY OF PRINCETON, INDIANA (the "Issuer"), a
municipal corporation organized and existing under the laws of the
State of Indiana, and PSI ENERGY, INC. (the "Company"), a public
utility and corporation duly organized and validly existing under
the laws of the State of Indiana. Capitalized terms used in the
following recitals are used as defined in Article I of this
Agreement.
Pursuant to Indiana Code, Title 36, Article 7, Chapters 11.9
and 12, and Indiana Code, Title 5, Article 1, Chapter 5
(collectively, the "Act"), the Issuer has determined to issue,
sell and deliver the Bonds, and to lend the proceeds derived from
the sale thereof to the Company to assist in the refunding of the
Refunded Bonds as defined below. The Refunded Bonds were issued
to refund a portion of the Series 1982 Bonds, as defined below,
which were originally issued to provide funds to make a loan to
the Company to assist in the financing of its portion of the costs
of the Project as defined below.
The Company and the Issuer each have full right and lawful
authority to enter into this Agreement and to perform and observe
the provisions hereof on their respective parts to be performed
and observed.
NOW THEREFORE, in consideration of the premises and the
mutual representations and agreements hereinafter contained, the
Issuer and the Company agree as follows (provided that any
obligation of the Issuer or the State created by or arising out of
this Agreement shall never constitute a general debt of the Issuer
or the State or give rise to any pecuniary liability of the Issuer
or the State but shall be payable solely out of Revenues,
including the Loan Payments made pursuant hereto and moneys drawn
under any Credit Facility):
ARTICLE I
DEFINITIONS
Section I.1. Use of Defined Terms. In addition to the words
and terms defined elsewhere in this Agreement or by reference to
another document, the words and terms set forth in Section 1.2
hereof shall have the meanings set forth therein unless the
context or use clearly indicates another meaning or intent. Such
definitions shall be equally applicable to both the singular and
plural forms of any of the words and terms defined therein.
Section I.2. Definitions. As used herein:
"Act" means, collectively, Indiana Code, Title 36, Article 7,
Chapters 11.9 and 12, and Title 5, Article 1, Chapter 5 as
amended.
"Additional Payments" means the amounts required to be paid
by the Company pursuant to the provisions of Section 4.2 hereof.
"Administration Expenses" means the compensation (which
compensation shall not be greater than that typically charged in
similar circumstances) and reimbursement of reasonable expenses
and advances payable to the Trustee, the Registrar, the
Remarketing Agent, any Paying Agent and any Authenticating Agent.
"Agreement" means this Loan Agreement, as amended or
supplemented from time to time.
"Alternate Credit Facility" means an Alternate Credit
Facility as defined in the Indenture.
"Authenticating Agent" means the Authenticating Agent as
defined in the Indenture.
"Bank" means the Bank as defined in the Indenture.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Purchase Fund" means the Bond Purchase Fund as defined
in the Indenture.
"Bond Resolution" means the ordinance of the Issuer providing
for the issuance of the Bonds and approving this Agreement, the
Indenture and related matters, as amended or supplemented from
time to time.
"Bond Service Charges" means, for any period or time, the
principal of, premium, if any, and interest due on the Bonds for
that period or payable at that time whether due at maturity or
upon acceleration or redemption or otherwise.
"Bonds" means the $35,000,000 Pollution Control Revenue
Refunding Bonds, 1997 Series (PSI Energy, Inc. Project), issued by
the Issuer pursuant to the Bond Resolution and the Indenture.
"Bonds Outstanding" or "Outstanding Bonds" means Outstanding
Bonds as defined in the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time. References to the Code and Sections of the
Code include relevant applicable regulations and proposed
regulations thereunder and under the Internal Revenue Code of
1954, as amended, and any successor provisions to those Sections,
regulations or proposed regulations and, in addition, all
applicable official rulings and judicial determinations under the
foregoing applicable to the Bonds.
"Conversion Date" means the Conversion Date as defined in the
Indenture.
"Credit Facility" means a Credit Facility as defined in the
Indenture.
"Credit Facility Account" means the Credit Facility Account
as defined in the Indenture.
"Credit Facility Issuer" means a Credit Facility Issuer as
defined in the Indenture.
"Eligible Investments" means Eligible Investments as defined
in the Indenture.
"Engineer" means an engineer (who may be an employee of the
Company) or engineering firm qualified to practice the profession
of engineering under the laws of the State and who or which is
acceptable to the Trustee.
"EPA" means the Department of Environmental Management of the
State and any successor body, agency, commission or department.
"Event of Default" means any of the events described as an
Event of Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or
events described as constituting Force Majeure in Section 7.1
hereof.
"Government Obligations" means Government Obligations as
defined in the Indenture.
"Holder" or "Holder of a Bond" means the Person in whose name
a Bond is registered on the Register.
"Indenture" means the Trust Indenture, dated as of the same
date as this Agreement, between the Issuer and the Trustee, as
amended or supplemented from time to time.
"Interest Rate for Advances" means the interest rate per year
payable on the Bonds.
"Letter of Credit" means the Letter of Credit as defined in
the Indenture.
"Loan" means the loan by the Issuer to the Company of the
proceeds received from the sale of the Bonds.
"Loan Payment Date" means any date on which any Bond Service
Charges are due and payable.
"Loan Payments" means the amounts required to be paid by the
Company in repayment of the Loan pursuant to Section 4.1 hereof.
"1954 Code" means the Internal Revenue Code of 1954 as
amended from time to time through the date of enactment of the
Code. References to the 1954 Code and Sections of the 1954 Code
include relevant applicable regulations (including temporary
regulations) and proposed regulations thereunder and any successor
provisions to those Sections, regulations or proposed regulations.
"Notice Address" means:
(a) As to the Issuer: City of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mayor
(b) As to the Company: PSI Energy, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
with a copy to:
PSI Energy, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
(c) As to the Trustee: The Fifth Third Bank of Central Indiana
Fifth Third Center
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
or such additional or different address, notice of which is given
under Section 8.3 hereof.
"Opinion of Bond Counsel" means a written opinion of
nationally recognized bond counsel selected by the Company and
acceptable to the Trustee who is experienced in matters relating
to the exclusion from gross income for federal income tax purposes
of interest on obligations issued by states and their political
subdivisions. Bond Counsel may be counsel to the Trustee or the
Company.
"Original Purchaser" means the Original Purchaser as defined
in the Indenture.
"Paying Agent" means the Paying Agent as defined in the
Indenture.
"Person" or words importing persons mean firms, associations,
partnerships (including without limitation, general and limited
partnerships), limited liability entities, joint ventures,
societies, estates, trusts, corporations, public or governmental
bodies, other legal entities and natural persons.
"Plant" means the ▇▇▇▇▇▇ Generating Station.
"Pollution Control Facility" or "Pollution Control
Facilities" means those facilities which are pollution control
facilities as defined in Section 9 of Chapter 11.9 of the Act.
"Project" or "Project Facilities" means the real, personal or
real and personal property, including undivided or other interests
therein, identified in the Project Description, originally
financed with the proceeds of the Series 1982 Bonds and refinanced
with the proceeds of the Refunded Bonds.
"Project Description" means collectively the description of
the Project Facilities originally financed with the proceeds of
the Series 1982 Bonds and refinanced with the proceeds of the
Refunded Bonds, attached hereto as Exhibit A, as the same may be
amended in accordance with this Agreement.
"Project Purposes" means the purposes of Pollution Control
Facilities as described in the Act and as particularly described
in Exhibit A hereto.
"Project Site" means the ▇▇▇▇▇▇ Generating Station in
Princeton, Indiana.
"Rate Period" means a Rate Period as defined in the
Indenture.
"Rebate Fund" means the Rebate Fund created in the Indenture.
"Refunded Bonds" means the $35,000,000 City of Princeton,
Indiana 7.60% Pollution Control Refunding Revenue Bonds 1987
Series (Public Service Company of Indiana, Inc. Project C) issued
on March 31, 1987.
"Refunded Bonds Indenture" means the Trust Indenture dated as
of March 15, 1987 between Bank One, Indianapolis, National
Association (as successor to American ▇▇▇▇▇▇▇▇ National Bank and
Trust Company) and the City of Princeton, Indiana.
"Refunded Bonds Loan Agreement" means the Loan Agreement
dated as of March 15, 1987 between the City of Princeton, Indiana
and Public Service Company of Indiana, Inc.
"Refunded Bonds Trustee" means Bank One, Indianapolis,
National Association (as successor to American ▇▇▇▇▇▇▇▇ National
Bank and Trust Company), as trustee under the Refunded Bonds
Indenture.
"Refunding Fund" means the Refunding Fund created in the
Indenture.
"Register" means the books kept and maintained for the
registration and transfer of Bonds pursuant to Section 3.05 of the
Indenture.
"Registrar" means the Registrar as defined in the Indenture.
"Reimbursement Agreement" means the Reimbursement Agreement
as defined in the Indenture.
"Remarketing Agent" means the Remarketing Agent as defined in
the Indenture.
"Revenues" means (a) the Loan Payments, (b) all other moneys
received or to be received by the Issuer (excluding the Issuer
Fee) or the Trustee in respect of repayment of the Loan, including
without limitation, all moneys and investments in the Bond Fund,
(c) any moneys and investments in the Refunding Fund, and (d) all
income and profit from the investment of the foregoing moneys.
The term "Revenues" does not include any moneys or investments in
the Rebate Fund or the Bond Purchase Fund.
"Series 1982 Bonds" means the $45,000,000 City of Princeton,
Indiana Pollution Control Revenue Bonds 1982 Series A and B
(Public Service Company of Indiana, Inc. Project C) issued on
April 21, 1982.
"Series 1982 B Bonds" means the $35,000,000 1982 Series B
portion of the Series 1982 Bonds which was refunded by the
Refunded Bonds.
"Series 1982 Indenture" means the Trust Indenture dated as of
April 1, 1982 between Bank One, Indianapolis, National Association
(as successor to American ▇▇▇▇▇▇▇▇ National Bank and Trust
Company) and the City of Princeton, Indiana.
"Series 1982 Loan Agreement" means the Loan Agreement dated
as of April 1, 1982 between the City of Princeton, Indiana and
Public Service Company of Indiana, Inc.
"State" means the State of Indiana.
"Term Rate Period" means a Term Rate Period as defined in the
Indenture.
"Trustee" means The Fifth Third Bank of Central Indiana
located in Indianapolis, Indiana, a corporation duly organized and
validly existing under the laws of the State, until a successor
Trustee shall have become such pursuant to the applicable
provisions of the Indenture, and thereafter "Trustee" shall mean
the successor Trustee. "Principal Office" of the Trustee shall
mean the principal corporate trust office of the Trustee, which
office at the date of issuance of the Bonds is located at its
Notice Address.
"Unassigned Issuer Rights" means all of the rights of the
Issuer to receive Additional Payments under Section 4.2 hereof, to
inspection pursuant to Section 5.1 hereof, to be held harmless and
indemnified under Section 5.9 hereof, to be reimbursed for
attorney's fees and expenses under Section 7.4 hereof and to give
or withhold consent to amendments, changes, modifications,
alterations and termination of this Agreement under Section 8.6
hereof and its right to enforce such rights.
"Variable Rate" means a Variable Rate as defined in the
Indenture.
Section I.3. Interpretation. Any reference herein to the
State, to the Issuer or to any member or officer of either
includes entities or officials succeeding to their respective
functions, duties or responsibilities pursuant to or by operation
of law or lawfully performing their functions.
Any reference to a section or provision of the Constitution
of the State or the Act, or to a section, provision or chapter of
the Indiana Code, or to any statute of the United States of
America, includes that section, provision or chapter as amended,
modified, revised, supplemented or superseded from time to time;
provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable
solely by reason of this provision, if it constitutes in any way
an impairment of the rights or obligations of the Issuer, the
State, the Holders, the Trustee, the Registrar, an Authenticating
Agent, a Paying Agent, the Credit Facility Issuer, the Remarketing
Agent, or the Company under this Agreement, the Indenture or the
Bonds.
Unless the context indicates otherwise, words importing the
singular number include the plural number, and vice versa; the
terms "hereof", "hereby", "herein", "hereto", "hereunder" and
similar terms refer to this Agreement; and the term "hereafter"
means after, and the term "heretofore" means before, the date of
delivery of the Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates
otherwise.
Section I.4. Captions and Headings. The captions and
headings in this Agreement are used solely for convenience of
reference and in no way define, limit or describe the scope or
intent of any Articles, Sections, subsections, paragraphs or
subparagraphs or clauses hereof.
(End of Article I)
ARTICLE II
REPRESENTATIONS
Section II.1. Representations of the Issuer. The Issuer
represents that: (a) it is a municipal corporation duly organized
and validly existing under the laws of the State; (b) it has duly
accomplished all conditions necessary to be accomplished by it
prior to the issuance and delivery of the Bonds and the execution
and delivery of this Agreement and the Indenture; (c) it is not in
violation of or in conflict with any provisions of the laws of the
State which would impair its ability to carry out its obligations
contained in this Agreement or the Indenture; (d) it is empowered
to enter into the transactions contemplated by this Agreement and
the Indenture; (e) it has duly authorized the execution, delivery
and performance of this Agreement and the Indenture; (f) it will
do all things in its power in order to maintain its existence or
assure the assumption of its obligations under this Agreement and
the Indenture by any successor municipal corporation; and (g)
following reasonable notice, a public hearing was held on February
18, 1997 with respect to the issuance of the Bonds as required by
Section 147(f) of the Code.
Section II.2. No Warranty by Issuer of Condition or
Suitability of the Project. The Issuer makes no warranty, either
express or implied, as to the suitability or utilization of the
Project for the Project Purposes, or as to the condition of the
Project Facilities or that the Project Facilities are or will be
suitable for the Company's purposes or needs.
Section II.3. Representations and Covenants of the Company.
The Company represents that:
(a) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State, with power
and authority (corporate and other) to own its properties and
conduct its business, to execute and deliver this Agreement and to
perform its obligations under this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Company and this Agreement constitutes a valid
and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(c) The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of law or
regulation applicable to the Company, or of any writ or decree of
any court or governmental instrumentality, or of the Amended
Articles of Consolidation, as amended, or the By-laws of the
Company, or of any mortgage, indenture, contract, agreement or
other undertaking to which the Company is a party or which
purports to be binding upon the Company or upon any of its assets.
(d) Substantially all (at least 90%) of the proceeds of the
Series 1982 Bonds were used to provide "solid waste disposal
facilities" within the meaning of Section 103(b)(4)(E) of the 1954
Code and "pollution control facilities" within the meaning of
Section 103(b)(4)(F) of the 1954 Code, the original use of which
facilities commenced with the Company on October 1, 1982, and
which facilities were described in an inducement resolution
adopted by the Issuer on October 16, 1978. Construction of such
facilities financed with the proceeds of the Series 1982 Bonds was
not commenced prior to October 16, 1978. All of the proceeds of
the Series 1982 Bonds have been spent for the Project pursuant to
the Series 1982 Loan Agreement or to pay costs of issuance of the
Series 1982 Bonds. The proceeds of the Refunded Bonds (other than
any accrued interest thereon) were used exclusively to refund the
Series 1982 B Bonds; any investment earnings on such proceeds of
the Refunded Bonds were used to pay principal, premium or interest
on the Series 1982 B Bonds; and none of the proceeds of the
Refunded Bonds was used to pay for any costs of issuance of the
Refunded Bonds. The Series 1982 B Bonds were issued prior to
August 16, 1986. The principal amount of the Refunded Bonds did
not exceed the then outstanding principal amount of the Series
1982 B Bonds. The proceeds of the Refunded Bonds were used to
retire the Series 1982 B Bonds not later than 90 days after the
date of issuance of the Refunded Bonds. The proceeds of the Bonds
(other than any accrued interest thereon) will be used exclusively
to refund the Refunded Bonds; any investment earnings on such
proceeds of the Bonds will be used to pay principal, premium or
interest on the Refunded Bonds; and none of the proceeds of the
Bonds will be used to pay for any costs of issuance of the Bonds.
The Refunded Bonds are part of a series of refundings of which
the Series 1982 B Bonds are the original bonds. The principal
amount of the Bonds does not exceed the outstanding principal
amount of the Refunded Bonds. The proceeds of the Bonds will be
used to retire the Refunded Bonds not later than 90 days after the
date of issuance of the Bonds.
(e) It has caused the Project to be substantially
completed. The Project constitutes Pollution Control Facilities
under the Act and is consistent with the purposes of the Act. The
Project is being, and the Company will cause the Project to be,
operated and maintained in such manner to conform with all
applicable zoning, planning, building, environmental and other
applicable governmental regulations and all permits, variances and
orders issued or granted pursuant thereto, including the
permit-to-install for the Project, which permits, variances and
orders have not been withdrawn or otherwise suspended, and to be
consistent with the Act.
(f) It has used or operated or has caused to be used or
operated, and presently intends to use or operate or cause to be
used or operated the Project Facilities in a manner consistent
with the Project Purposes until the date on which the Bonds have
been fully paid and knows of no reason why the Project Facilities
will not be so operated. The Company does not intend to sell or
otherwise dispose of the Project or any portion thereof.
(g) None of the proceeds of the Series 1982 Bonds or the
Refunded Bonds were used and none of the proceeds of the Bonds
will be used to provide any airplane, skybox or other private
luxury box, or health club facility, any facility primarily used
for gambling or any store the principal business of which is the
sale of alcoholic beverages for consumption off premises.
(h) Less than 25% of the proceeds of the Series 1982 Bonds
and less than 25% of the proceeds of the Refunded Bonds have been
used and less than 25% of the proceeds of the Bonds will be used
directly or indirectly to acquire land or any interest therein,
and none of such proceeds has been or will be used to provide land
which is to be used for farming purposes.
(i) No portion of the proceeds of the Series 1982 Bonds or
the Refunded Bonds has been used and no portion of the proceeds of
the Bonds will be used to acquire existing property or any
interest therein unless the first use of such property was by the
Company and was pursuant to and followed such acquisition.
(j) After the expiration of any applicable temporary period
under Section 148(d)(3) of the Code, at no time during any bond
year will the aggregate amount of gross proceeds of the Bonds
invested in higher yielding investments (within the meaning of
Section 148(b) of the Code) exceed 150 percent of the debt service
on the Bonds for such bond year and the aggregate amount of gross
proceeds of the Bonds invested in higher yielding investments, if
any, will be promptly and appropriately reduced as the
outstanding amount of the Bonds is reduced, provided however that
the foregoing shall not require the sale or disposition of any
investments in higher yielding investments if such sale or
disposition would result in a loss which exceeds the amount which
would be paid to the United States (but for such sale or
disposition) at the time of such sale or disposition if a payment
were due at such time. At no time will any funds constituting
gross proceeds of the Bonds be used in a manner as would
constitute failure of compliance with Section 148 of the Code.
The terms "bond year", "gross proceeds", "higher yielding
investments", "yield", and "debt service" have the meanings
assigned to them for purposes of Section 148 of the Code.
(k) The Series 1982 Bonds and the Refunded Bonds were not,
and the Bonds will not be, "federally guaranteed" within the
meaning of Section 149(b) of the Code.
(l) It is not anticipated that as of the date hereof, there
will be created any "replacement proceeds", within the meaning of
Section 1.148-1(c) of the Treasury Regulations, with respect to
the Bonds; however, in the event that any such replacement
proceeds are deemed to have been created, such amounts will be
invested in compliance with Section 148 of the Code.
(m) On the date of issuance and delivery of the Series 1982
Bonds, the Company reasonably expected that at least 85% of the
spendable proceeds of the Series 1982 Bonds would be expended to
carry out the governmental purpose of such issue within the 3-year
period beginning on the issue date of such issue. All of the
spendable proceeds of the Series 1982 Bonds were expended as of
the date of issuance of the Refunded Bonds. None of the proceeds
of the Series 1982 Bonds were invested in nonpurpose investments
having a substantially guaranteed yield for four years or more.
(n) The weighted average maturity of the Bonds does not
exceed 120% of the average reasonably expected economic life of
the Project Facilities financed by the proceeds of the Series 1982
Bonds and refinanced by the proceeds of the Refunded Bonds
(determined under Section 147(b) of the Code).
(o) The information furnished by the Company and used by
the Issuer in preparing the certifications and statements pursuant
to Sections 148 and 149(e) of the Code or their statutory
predecessors with respect to the Series 1982 Bonds and the
Refunded Bonds was accurate and complete as of the respective
dates of issuance of the Series 1982 Bonds and the Refunded Bonds,
and the information furnished by the Company and used by the
Issuer in preparing the certification pursuant to Section 148 of
the Code and in preparing the information statement pursuant to
Section 149(e) of the Code, both referred to in the Bond
Resolution, will be accurate and complete as of the date of
issuance of the Bonds.
(p) The Project Facilities do not include any office except
for offices (i) located on the Project Site and (ii) not more than
a de minimis amount of the functions to be performed at which is
not directly related to the day-to-day operations of the Project
Facilities.
(End of Article II)
ARTICLE III
COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS
Section III.1. Acquisition, Construction and Installation.
The Company represents that it has caused the Project Facilities
to be acquired, constructed and installed on the Project Site,
substantially in accordance with the Project Description and in
conformance with all applicable zoning, planning, building and
other similar regulations of all governmental authorities having
jurisdiction over the Project and all permits, variances and
orders issued in respect of the Project by EPA, and that the
proceeds derived from the Series 1982 Bonds and Refunded Bonds,
respectively, including any investment thereof, were expended in
accordance with the Series 1982 Indenture and Refunded Bonds
Indenture, respectively, and the Series 1982 Loan Agreement and
Refunded Bonds Loan Agreement, respectively.
Section III.2. Project Description. The Project Description
may be changed from time to time by, or with the consent of, the
Company provided that any such change shall also be filed with the
Issuer and provided further that no change in the Project
Description shall materially change the function of the Project
Facilities unless the Trustee shall have received (i) an
Engineer's certificate that such changes will not impair the
significance or character of the Project Facilities as Pollution
Control Facilities and (ii) an Opinion of Bond Counsel or ruling
of the Internal Revenue Service to the effect that such amendment
will not adversely affect the exclusion of interest on the Bonds
from gross income for federal income tax purposes.
Section III.3. Issuance of the Bonds; Application of
Proceeds. To provide funds to make the Loan to the Company to
assist the Company in the refunding of the Refunded Bonds, the
Issuer will issue, sell and deliver the Bonds to the Original
Purchaser. The Bonds will be issued pursuant to the Indenture in
the aggregate principal amount, will bear interest, will mature
and will be subject to redemption as set forth therein. The
Company hereby approves the terms and conditions of the Indenture
and the Bonds, and the terms and conditions under which the Bonds
will be issued, sold and delivered.
The Company hereby requests that the Issuer notify the
Refunded Bonds Trustee (unless the Refunded Bonds Trustee has
already received such notice), pursuant to the Refunded Bonds
Indenture, that the entire outstanding principal amount of the
Refunded Bonds is to be redeemed on March 28, 1997 at a redemption
price of 102% of the principal amount thereof plus accrued
interest to that redemption date.
The proceeds from the sale of the Bonds (other than any
accrued interest) shall be loaned to the Company to assist the
Company in refunding the Refunded Bonds in order to reduce the
interest cost payable by the Company; those proceeds shall be
deposited in the Refunding Fund. On March 28, 1997 all moneys on
deposit in the Refunding Fund shall be disbursed by the Trustee as
provided in Section 5.02 of the Indenture to the Refunded Bonds
Trustee for deposit in the Bond Fund created in the Refunded Bonds
Indenture and applied by the Refunded Bonds Trustee to the payment
of principal of and interest on the Refunded Bonds on their
redemption on March 28, 1997. The Company shall pay to the
Refunded Bonds Trustee such additional amounts as shall be
required to pay in full on such date the entire amount of
principal of, premium and interest due on the Refunded Bonds.
Pending disbursement pursuant to this Section, the proceeds
so deposited in the Refunding Fund, together with any investment
earnings thereon, shall constitute a part of the Revenues assigned
by the Issuer to the Trustee for the payment of Bond Service
Charges. Any accrued interest shall be deposited in the Bond
Fund.
Section III.4. Investment of Fund Moneys. At the oral
(confirmed promptly in writing) or written request of the Company,
any moneys held as part of the Bond Fund, the Refunding Fund or
the Rebate Fund shall be invested or reinvested by the Trustee in
Eligible Investments; provided, that such moneys shall be invested
or reinvested by the Trustee only in Eligible Investments which
shall mature, or which shall be subject to redemption by the
holder thereof at the option of such holder, not later than the
date upon which the moneys so invested are needed to make payments
from those Funds. The Issuer (to the extent it retained or
retains direction or control) and the Company each hereby
represents that the investment and reinvestment and the use of the
proceeds of the Series 1982 Bonds and of the Refunded Bonds were
restricted in such manner and to such extent as was necessary so
that the Series 1982 Bonds and the Refunded Bonds would not
constitute arbitrage bonds under Section 148 of the Code or its
statutory predecessor and each hereby covenants that it will
restrict that investment and reinvestment and the use of the
proceeds of the Bonds in such manner and to such extent, if any,
as may be necessary so that the Bonds will not constitute
arbitrage bonds under Section 148 of the Code.
The Company shall provide the Issuer with, and the Issuer may
base its certificate and statement, each as authorized by the Bond
Resolution, on a certificate of an appropriate officer, employee
or agent of or consultant to the Company for inclusion in the
transcript of proceedings for the Bonds, setting forth the
reasonable expectations of the Company on the date of delivery of
and payment for the Bonds regarding the amount and use of the
proceeds of the Bonds and the facts, estimates and circumstances
on which those expectations are based.
Section III.5. Rebate Fund. To the extent required by
Section 5.08 of the Indenture, within five days after the end of
the fifth Bond Year (as defined in the Indenture) and every fifth
Bond Year thereafter, and within five days after payment in full
of all outstanding Bonds, the Company shall calculate the amount
of Excess Earnings (as defined in the Indenture) as of the end of
that Bond Year or the date of such payment and shall notify the
Trustee of that amount. If the amount then on deposit in the
Rebate Fund created under the Indenture is less than the amount of
Excess Earnings (computed by taking into account the amount or
amounts, if any, previously paid to the United States pursuant to
Section 5.08 of the Indenture and this Section), the Company
shall, within five days after the date of the aforesaid
calculation, pay to the Trustee for deposit in the Rebate Fund an
amount sufficient to cause the Rebate Fund to contain an amount
equal to the Excess Earnings. The obligation of the Company to
make such payments shall remain in effect and be binding upon the
Company notwithstanding the release and discharge of the
Indenture. The Company shall obtain and keep such records of the
computations made pursuant to this Section as are required under
Section 148(f) of the Code.
(End of Article III)
ARTICLE IV
LOAN BY ISSUER; LOAN PAYMENTS;
ADDITIONAL PAYMENTS; AND CREDIT FACILITY
Section IV.1. Loan Repayment. Upon the terms and conditions
of this Agreement, the Issuer agrees to make the Loan to the
Company. The proceeds of the Loan shall be deposited with the
Trustee pursuant to Section 3.3 hereof. In consideration of and
in repayment of the Loan, the Company shall make, as Loan
Payments, to the Trustee for the account of the Issuer, payments
which correspond, as to time, and are equal in amount as of the
Loan Payment Date, to the corresponding Bond Service Charges
payable on the Bonds. All Loan Payments received by the Trustee
shall be held and disbursed in accordance with the provisions of
the Indenture and this Agreement for application to the payment of
Bond Service Charges.
The Company shall be entitled to a credit against the Loan
Payments required to be made on any Loan Payment Date to the
extent that the balance of the Bond Fund is then in excess of
amounts required (a) for the payment of Bonds theretofore matured
or theretofore called for redemption, or to be called for
redemption pursuant to Section 6.1 hereof (b) for the payment of
interest for which checks or drafts have been drawn and mailed by
the Trustee or Paying Agent, and (c) to be deposited in the Bond
Fund by the Indenture for use other than for the payment of Bond
Service Charges due on that Loan Payment Date.
The Company's obligation to make Loan Payments shall be
reduced to the extent of any payments made by any Credit Facility
Issuer to the Trustee in respect of the principal of, premium, if
any, or interest on the Bonds when due pursuant to any Credit
Facility, provided, that the Credit Facility Issuer has been
reimbursed for such payments in accordance with the terms of the
Reimbursement Agreement.
Except for such interest of the Company as may hereafter
arise pursuant to Section 8.2 hereof or Sections 5.06 or 5.07 of
the Indenture, the Company and the Issuer each acknowledge that
neither the Company, the State nor the Issuer has any interest in
the Bond Fund or the Bond Purchase Fund, and any moneys deposited
therein shall be in the custody of and held by the Trustee in
trust for the benefit of the Holders.
Section IV.2. Additional Payments. The Company shall pay to
the Issuer, as Additional Payments hereunder, any and all costs
and expenses incurred or to be paid by the Issuer in connection
with the issuance and delivery of the Bonds or otherwise related
to actions taken by the Issuer under this Agreement or the
Indenture.
The Company shall pay the Administration Expenses to the
Trustee, the Registrar, the Remarketing Agent, and any Paying
Agent or Authenticating Agent, as appropriate, as Additional
Payments hereunder.
The Company may, without creating a default hereunder,
contest in good faith the reasonableness of any such cost or
expense incurred or to be paid by the Issuer and any
Administration Expenses claimed to be due to the Trustee, the
Registrar, the Remarketing Agent, any Paying Agent or any
Authenticating Agent.
In the event the Company should fail to pay any Loan
Payments, Additional Payments or Administration Expenses when due,
the payment in default shall continue as an obligation of the
Company until the amount in default shall have been fully paid
together with interest thereon during the default period at the
Interest Rate for Advances.
Section IV.3. Place of Payments. The Company shall make all
Loan Payments directly to the Trustee at its Principal Office.
Additional Payments shall be made directly to the person or entity
to whom or to which they are due.
Section IV.4. Obligations Unconditional. The obligations of
the Company to make Loan Payments, Additional Payments and any
payments required of the Company under Section 5.09 of the
Indenture shall be absolute and unconditional, and the Company
shall make such payments without abatement, diminution or
deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or
counterclaim which the Company may have or assert against the
Issuer, the Trustee, the Registrar, the Remarketing Agent or any
other Person.
Section IV.5. Assignment of Revenues and Agreement. To
secure the payment of Bond Service Charges, the Issuer shall, by
the Indenture, (a) absolutely and irrevocably assign to the
Trustee, its successors in trust and its and their assigns
forever, (1) all right, title and interest of the Issuer in and to
all moneys and investments (including, without limitation, the
proceeds of the Credit Facility) in the Bond Fund and (2) all of
the Issuer's rights and remedies under this Agreement (except for
the Unassigned Issuer Rights), and (b) grant a security interest
to the Trustee, its successors in trust and its and their assigns
forever, in all of its rights to and interest in the Revenues
including, without limitation, all Loan Payments and other amounts
receivable by or on behalf of the Issuer under the Agreement in
respect of repayment of the Loan (other than the Credit Facility
Account, all moneys and investments therein and the proceeds of
the Credit Facility). The Company hereby agrees and consents to
those assignments and that grant of a security interest.
Section IV.6. Credit Facility; Alternate Credit Facility;
Cancellation. (a) The Company agrees to provide for the payment
of the principal of and interest on the Bonds and for payment of
the purchase price of Bonds delivered to the Trustee or Paying
Agent pursuant to the Indenture by causing the Letter of Credit to
be delivered to the Trustee on the date of the delivery of the
Bonds. The Company hereby authorizes and directs the Trustee to
draw moneys under the Letter of Credit, in accordance with its
terms and the terms of the Indenture, to the extent necessary to
pay the principal of and interest on the Bonds when due and to pay
the purchase price of Bonds as provided in the Indenture. The
Company may, at its election and with the consent of the Bank,
provide for one or more extensions of the Letter of Credit beyond
its then stated date of expiration.
(b) Upon satisfaction of the requirements contained in
Section 14.03 of the Indenture, the Company may provide for the
delivery of an Alternate Credit Facility.
(c) Upon satisfaction of the conditions contained in
Section 14.02 of the Indenture, the Company may cancel any Credit
Facility in effect at such time and direct the Trustee in writing
to surrender such Credit Facility to the Credit Facility Issuer
by which it was issued in accordance with the Indenture; provided,
that no such cancellation shall become effective and no such
surrender shall take place until all Bonds subject to purchase
pursuant to Section 4.07(d) of the Indenture have been so
purchased or redeemed with the proceeds of such Credit Facility.
Section .1. Company's Option to Elect Rate Period. The
Company shall have, and is hereby granted, the option to elect to
convert on any Conversion Date the interest rate borne by the
Bonds to another Variable Rate to be effective for a Rate Period
pursuant to the provisions of Article II of the Indenture and
subject to the terms and conditions set forth therein. To
exercise such options, the Company shall give the written notice
required by the Indenture.
Section .2. Company's Obligation to Purchase Bonds. The
Company hereby agrees to pay or cause to be paid to the Trustee or
the Paying Agent, on or before each day on which Bonds may be or
are required to be tendered for purchase, amounts equal to the
amounts to be paid by the Trustee or the Paying Agent with respect
to the Bonds tendered for purchase on such dates pursuant to
Article IV of the Indenture; provided, however, that the
obligation of the Company to make any such payment under this
Section shall be reduced by the amount of (A) moneys paid by the
Remarketing Agent as proceeds of the remarketing of such Bonds by
the Remarketing Agent, (B) moneys drawn under any Credit Facility,
for the purpose of paying such purchase price and (C) other moneys
made available by the Company, as set forth in Section 4.08(b)(ii)
of the Indenture.
(End of Article IV)
ARTICLE I
ADDITIONAL AGREEMENTS AND COVENANTS
Section I.1. Right of Inspection. The Company agrees that,
subject to reasonable security and safety regulations and to
reasonable requirements as to notice, the Issuer and the Trustee
and their or any of their respective duly authorized agents shall
have the right at all reasonable times to enter upon the Project
Site to examine and inspect the Projects.
Section I.2. Maintenance. The Company shall use its best
efforts to keep and maintain the Project Facilities, including all
appurtenances thereto and any personal property therein or
thereon, in good repair and good operating condition so that the
Project Facilities will continue to constitute Pollution Control
Facilities, for the purposes of the operation thereof as required
by Section 5.4 hereof.
So long as such shall not be in violation of the Act or
impair the character of the Project Facilities as Pollution
Control Facilities, and provided there is continued compliance
with applicable laws and regulations of governmental entities
having jurisdiction thereof, the Company shall have the right to
remodel the Project Facilities or make additions, modifications
and improvements thereto, from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes,
the cost of which remodeling, additions, modifications and
improvements shall be paid by the Company and the same shall, when
made, become a part of the Project Facilities.
Section I.3. Removal of Portions of the Project Facilities.
The Company shall not be under any obligation to renew, repair or
replace any inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary portions of the Project Facilities,
except that, subject to Section 5.4 hereof, it will use its best
efforts to ensure the continued character of the Project
Facilities as Pollution Control Facilities. The Company shall
have the right from time to time to substitute personal property
or fixtures for any portions of the Project Facilities, provided
that the personal property or fixtures so substituted shall not
impair the character of the Project Facilities as Pollution
Control Facilities. Any such substituted property or fixtures
shall, when so substituted, become a part of the Project
Facilities. The Company shall also have the right to remove any
portion of the Project Facilities, without substitution therefor;
provided, that the Company shall deliver to the Trustee a
certificate signed by an Engineer describing said portion of the
Project Facilities and stating that the removal of such property
or fixtures will not impair the character of the Project
Facilities as Pollution Control Facilities.
Section I.4. Operation of Project Facilities. The Company
will, subject to its obligations and rights to maintain, repair or
remove portions of the Project Facilities, as provided in Sections
5.2 and 5.3 hereof, use its best efforts to continue operation of
the Project Facilities so long as and to the extent that operation
thereof is required to comply with laws or regulations of
governmental entities having jurisdiction thereof or unless the
Issuer shall have approved the discontinuance of such operation
(which approval shall not be unreasonably withheld). The Company
agrees that it will, within the design capacities thereof, use its
best efforts to operate and maintain the Project Facilities in
accordance with all applicable, valid and enforceable rules and
regulations of governmental entities having jurisdiction thereof;
provided, that the Company reserves the right to contest in good
faith any such laws or regulations.
Nothing in this Agreement shall prevent or restrict the
Company, in its sole discretion, at any time, from discontinuing
or suspending either permanently or temporarily its use of any
facility of the Company served by the Project Facilities and in
the event such discontinuance or suspension shall render
unnecessary the continued operation of the Project Facilities, the
Company shall have the right to discontinue the operation of the
Project Facilities during the period of any such discontinuance or
suspension.
Section I.5. Insurance. The Company shall cause the Project
Facilities to be kept insured against fire or other casualty to
the extent that property of similar character is usually so
insured by companies similarly situated and operating like
properties, to a reasonable amount by reputable insurance
companies or, in lieu of or supplementing such insurance in whole
or in part, adopt some other method or plan of protection against
loss by fire or other casualty at least equal in protection to the
method or plan of protection against loss by fire or other
casualty of companies similarly situated and operating properties
subject to similar or greater fire or other hazards or on which
properties an equal or higher primary fire or other casualty
insurance rate has been set by reputable insurance companies.
Section I.6. Workers' Compensation Coverage. Throughout the
term of this Agreement, the Company shall comply, or cause
compliance, with applicable workers' compensation laws of the
State.
Section I.7. Damage; Destruction and Eminent Domain. If,
during the term of this Agreement, the Project Facilities or any
portion thereof is destroyed or damaged in whole or in part by
fire or other casualty, or title to, or the temporary use of, the
Project Facilities or any portion thereof shall have been taken by
the exercise of the power of eminent domain, the Company (unless
it shall have exercised its option to prepay the Loan Payments
pursuant to Section 6.2 hereof) shall promptly repair, rebuild or
restore the portion of the Project Facilities so damaged,
destroyed or taken with such changes, alterations and
modifications (including the substitution and addition of other
property) as may be necessary or desirable for the administration
and operation of the Project Facilities as Pollution Control
Facilities and as shall not impair the character or significance
of the Project Facilities as furthering the purposes of the Act.
Section I.8. Company to Maintain its Corporate Existence;
Conditions Under Which Exceptions Permitted. The Company agrees
that, during the term of this Agreement, it will maintain its
corporate existence, will not dissolve or otherwise dispose of all
or substantially all of its assets and will not consolidate with
or merge into another corporation or permit one or more other
corporations to consolidate with or merge into it; provided that
the Company may, without violating its agreement contained in this
Section, consolidate with or merge into another corporation, or
permit one or more other corporations to consolidate with or merge
into it, or sell or otherwise transfer to another corporation all
or substantially all of its assets as an entirety and thereafter
dissolve, provided the surviving, resulting or transferee
corporation, as the case may be (if other than the Company), is a
corporation organized and existing under the laws of one of the
states of the United States, and assumes in writing all of the
obligations of the Company herein, and, if not an Indiana
corporation, is qualified to do business in the State.
If consolidation, merger or sale or other transfer is made as
provided in this Section, the provisions of this Section shall
continue in full force and effect and no further consolidation,
merger or sale or other transfer shall be made except in
compliance with the provisions of this Section.
Section I.9. Indemnification. The Company releases the
Issuer from, agrees that the Issuer shall not be liable for, and
indemnifies the Issuer against, all liabilities, claims, costs and
expenses imposed upon or asserted against the Issuer on account
of: (a) any loss or damage to property or injury to or death of
or loss by any person that may be occasioned by any cause
whatsoever pertaining to the construction, maintenance, operation
and use of the Project Facilities; (b) any breach or default on
the part of the Company in the performance of any covenant or
agreement of the Company under this Agreement or any related
document, or arising from any act or failure to act by the
Company, or any of its agents, contractors, servants, employees or
licensees; (c) the authorization, issuance and sale of the Bonds,
and the provision of any information furnished in connection
therewith concerning the Project Facilities or the Company
(including, without limitation, any information furnished by the
Company for inclusion in any certifications made by the Issuer
under Section 3.4 hereof or for inclusion in, or as a basis for
preparation of, the Form 8038 information statement to be filed by
the Issuer); and (d) any claim or action or proceeding with
respect to the matters set forth in (a), (b) and (c) above brought
thereon.
The Company agrees to indemnify the Trustee, the Paying
Agent, the Remarketing Agent and the Registrar (each hereinafter
referred to in this section as an "indemnified party") for and to
hold each of them harmless against all liabilities, claims, costs
and expenses incurred without negligence or willful misconduct on
the part of the indemnified party, on account of any action taken
or omitted to be taken by the indemnified party in accordance with
the terms of this Agreement, the Bonds or the Indenture or any
action taken at the request of or with the consent of the Company,
including the costs and expenses of the indemnified party in
defending itself against any such claim, action or proceeding
brought in connection with the exercise or performance of any of
its powers or duties under this Agreement, the Bonds or the
Indenture.
In case any action or proceeding is brought against the
Issuer or an indemnified party in respect of which indemnity may
be sought hereunder, the party seeking indemnity promptly shall
give notice of that action or proceeding to the Company, and the
Company upon receipt of that notice shall have the obligation and
the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not
relieve the Company from any of its obligations under this Section
unless that failure prejudices the defense of the action or
proceeding by the Company. At its own expense, an indemnified
party may employ separate counsel and participate in the defense;
provided, however, where it is ethically inappropriate for one
firm to represent the interests of the Issuer and any other
indemnified party or parties, the Company shall pay the Issuer's
legal expenses in connection with the Issuer's retention of
separate counsel. The Company shall not be liable for any
settlement made without its consent.
The indemnification set forth above is intended to and shall
include the indemnification of all affected officials, directors,
officers and employees of the Issuer, the Trustee, the Paying
Agent, the Remarketing Agent and the Registrar, respectively.
That indemnification is intended to and shall be enforceable by
the Issuer, the Trustee, the Paying Agent, the Remarketing Agent
and the Registrar, respectively, to the full extent permitted by
law.
Section I.10. Company Not to Adversely Affect Exclusion of
Interest on Bonds From Gross Income For Federal Income Tax
Purposes. The Company hereby covenants and represents that it has
taken and caused to be taken and shall take and cause to be taken
all actions that may be required of it for the interest on the
Bonds to be and remain excluded from the gross income of the
Holders for federal income tax purposes, and that it has not taken
or permitted to be taken on its behalf, and covenants that it will
not take, or permit to be taken on its behalf, any action which,
if taken, would adversely affect that exclusion under the
provisions of the Code.
Section I.11. Use of Project Facilities. The Issuer agrees
that it will not take any action, or cause any action to be taken
on its behalf, to interfere with the Company's ownership interest
in the Project or to prevent the Company from having possession,
custody, use and enjoyment of the Project other than pursuant to
Article VII of this Agreement or Article VII of the Indenture.
Section I.12. Assignment by Company. This Agreement may be
assigned in whole or in part by the Company without the necessity
of obtaining the consent of either the Issuer or the Trustee,
subject, however, to each of the following conditions:
(a) No assignment (other than pursuant to Section 5.8
hereof) shall relieve the Company from primary liability for any
of its obligations hereunder, and in the event of any such
assignment the Company shall continue to remain primarily liable
for the payment of the Loan Payments and Additional Payments and
for performance and observance of the agreements on its part
herein provided to be performed and observed by it.
(b) Any assignment by the Company must 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 the obligations of the Company hereunder to
the extent of the interest assigned.
(c) The Company shall, within 30 days after execution
thereof, furnish or cause to be furnished to the Issuer and the
Trustee a true and complete copy of each such assignment together
with any instrument of assumption.
(d) Any assignment from the Company shall not materially
impair fulfillment of the Project Purposes to be accomplished by
operation of the Project as herein provided.
(End of Article V)
ARTICLE II
REDEMPTION
Section II.1. Optional Redemption. Provided no Event of
Default shall have occurred and be subsisting, at any time and
from time to time, the Company may deliver moneys to the Trustee
in addition to Loan Payments or Additional Payments required to be
made and direct the Trustee to use the moneys so delivered for the
purpose of calling Bonds for optional redemption in accordance
with the applicable provisions of the Indenture providing for
optional redemption at the redemption price stated in the
Indenture. Pending application for those purposes, any moneys so
delivered shall be held by the Trustee in a special account in the
Bond Fund and delivery of those moneys shall not, except as set
forth in Section 4.1 hereof, operate to ▇▇▇▇▇ or postpone Loan
Payments or Additional Payments otherwise becoming due or to alter
or suspend any other obligations of the Company under this
Agreement.
Section II.2. Extraordinary Optional Redemption. The
Company shall have, subject to the conditions hereinafter imposed,
the option during a Term Rate Period to direct the redemption of
the Bonds in whole in accordance with the applicable provisions of
the Indenture upon the occurrence of any of the following events:
(a) The Project or the Plant shall have been damaged or
destroyed to such an extent that (1) the Project or the Plant
cannot reasonably be expected to be restored, within a period of
six consecutive months, to the condition thereof immediately
preceding such damage or destruction or (2) the Company is
reasonably expected to be prevented from carrying on its normal
use and operation of the Project or the Plant for a period of six
consecutive months.
(b) Title to, or the temporary use of, all or a significant
part of the Project or the Plant shall have been taken under the
exercise of the power of eminent domain to such an extent (1) that
the Project or the Plant cannot reasonably be expected to be
restored within a period of six consecutive months to a condition
of usefulness comparable to that existing prior to the taking or
(2) the Company is reasonably expected to be prevented from
carrying on its normal use and operation of the Project or the
Plant for a period of six consecutive months.
(c) As a result of any changes in the Constitution of the
State, the Constitution of the United States of America or any
state or federal laws or as a result 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 any contest thereof by
the Issuer or the Company in good faith, this Agreement shall have
become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as expressed
in this Agreement.
(d) Unreasonable burdens or excessive liabilities shall
have been imposed upon the Issuer or the Company with respect to
the Project or the Plant or the operation thereof, including,
without limitation, the imposition of federal, state or other ad
valorem, property, income or other taxes other than ad valorem
taxes at the rates presently levied upon privately owned property
used for the same general purpose as the Project or the Plant.
(e) Changes in the economic availability of raw materials,
operating supplies, energy sources or supplies or facilities
(including, but not limited to, facilities in connection with the
disposal of industrial wastes) necessary for the operation of the
Project or the Plant for the Project Purposes occur or
technological or other changes occur which the Company cannot
reasonably overcome or control and which in the Company's
reasonable judgment render the Project or the Plant uneconomic or
obsolete for the Project Purposes.
(f) Any court or administrative body shall enter a
judgment, order or decree, or shall take administrative action,
requiring the Company to cease all or any substantial part of its
operations served by the Project or the Plant to such extent that
the Company is or will be prevented from carrying on its normal
operations at the Project or the Plant for a period of six
consecutive months.
(g) The termination by the Company of operations at the
Plant.
The amount payable by the Company in the event of its
exercise of the option granted in this Section shall be the sum of
the following:
(i) An amount of money which, when added to the
moneys and investments held to the credit of the Bond Fund,
will be sufficient pursuant to the provisions of the
Indenture to pay, at 100% of the principal amount thereof
plus accrued interest to the redemption date, and discharge,
all Outstanding Bonds on the earliest applicable redemption
date, that amount to be paid to the Trustee, plus
(ii) An amount of money equal to the Additional
Payments relating to those Bonds accrued and to accrue until
actual final payment and redemption of those Bonds, that
amount or applicable portions thereof to be paid to the
Trustee or to the Persons to whom those Additional Payments
are or will be due.
The requirement of (ii) above with respect to Additional Payments
to accrue may be met if provisions satisfactory to the Trustee and
the Issuer are made for paying those amounts as they accrue.
The rights and options granted to the Company in this Section
may be exercised whether or not the Company is in default
hereunder; provided, that such default will not relieve the
Company from performing those actions which are necessary to
exercise any such right or option granted hereunder.
Section II.3. Mandatory Redemption. The Company shall
deliver to the Trustee the moneys needed to redeem the Bonds in
accordance with any mandatory redemption provisions relating
thereto as may be set forth in Sections 4.01(b) of the Indenture.
Section II.4. Notice of Redemption. In order to exercise an
option granted in, or to consummate a redemption required by, this
Article VI, the Company shall, within 180 days following the event
authorizing the exercise of such option, or at any time during the
continuation of the condition referred to in paragraphs (c), (d)
or (e) of Section 6.2 hereof, or at any time that optional
redemption of the Bonds is permitted under the Indenture as
provided in Section 6.1 hereof, or promptly upon the occurrence of
a Determination of Taxability (as defined in the Indenture), give
written notice to the Issuer and the Trustee that it is exercising
its option to direct the redemption of Bonds, or that the
redemption thereof is required by Section 4.01(b) of the Indenture
due to the occurrence of a Determination of Taxability, as the
case may be, in accordance with the Agreement and the Indenture,
and shall specify therein the date on which such redemption is to
be made, which date shall not be more than 180 days from the date
such notice is mailed. The Company shall make arrangements
satisfactory to the Trustee for the giving of the required notice
of redemption to the Holders of the Bonds, in which arrangements
the Issuer shall cooperate.
Section II.5. Actions by Issuer. At the request of the
Company or the Trustee, the Issuer shall take all steps required
of it under the applicable provisions of the Indenture or the
Bonds to effect the redemption of all or a portion of the Bonds
pursuant to this Article VI.
(End of Article VI)
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
Section III.1. Events of Default. Each of the following
shall be an Event of Default:
(a) The occurrence of an event of default as defined in
Section 7.01 (a), (b), (c) or (d) of the Indenture;
(b) The Company shall fail to observe and perform any other
agreement, term or condition contained in this Agreement, other
than such failure as will have resulted in an event of default
described in (a) above and the continuation of that failure for a
period of 90 days after notice thereof shall have been given to
the Company by the Issuer or the Trustee, or for such longer
period as the Issuer and the Trustee may agree to in writing;
provided, that failure shall not constitute an Event of Default so
long as the Company institutes curative action within the
applicable period and diligently pursues that action to completion
within 150 days after the expiration of initial cure period as
determined above, or within such longer period as the Issuer and
the Trustee may agree to in writing; and
(c) By decree of a court of competent jurisdiction the
Company shall be adjudicated a bankrupt, or an order shall be made
approving a petition or answer filed seeking reorganization or
readjustment of the Company under the federal bankruptcy laws or
other law or statute of the United States of America or of the
state of incorporation of the Company or of any other state, or,
by order of such a court, a trustee in bankruptcy, a receiver or
receivers shall be appointed of all or substantially all of the
property of the Company, and any such decree or order shall have
continued unstayed on appeal or otherwise and in effect for a
period of sixty (60) days; and
(d) The Company shall file a petition in voluntary
bankruptcy or shall make an assignment for the benefit of
creditors or shall consent to the appointment of a receiver or
receivers of all or any part of its property, or shall file a
petition seeking reorganization or readjustment under the Federal
bankruptcy laws or other law or statute of the United States of
America or any state thereof, or shall file a petition to take
advantage of any debtors' act.
Notwithstanding the foregoing, if, by reason of Force
Majeure, the Company is unable to perform or observe any
agreement, term or condition hereof which would give rise to an
Event of Default under subsection (b) hereof, the Company shall
not be deemed in default during the continuance of such inability.
However, the Company shall promptly give notice to the Trustee
and the Issuer of the existence of an event of Force Majeure and
shall use its best efforts to remove the effects thereof; provided
that the settlement of strikes or other industrial disturbances
shall be entirely within its discretion.
The term Force Majeure shall mean the following:
(i) acts of God; strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States
of America or of the State or any of their departments,
agencies, political subdivisions or officials, or any civil
or military authority; insurrections; civil disturbances;
riots; epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornados; storms; droughts; floods; arrests;
restraint of government and people; explosions; breakage,
nuclear accidents or other malfunction or accident to
facilities, machinery, transmission pipes or canals; partial
or entire failure of a utility serving the Project; shortages
of labor, materials, supplies or transportation; or
(ii) any cause, circumstance or event not
reasonably within the control of the Company.
The exercise of remedies hereunder shall be subject to any
applicable limitations of federal bankruptcy law affecting or
precluding that declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or
reorganization proceedings.
Section III.2. Remedies on Default. Whenever an Event of
Default shall have happened and be subsisting, either or both of
the following remedial steps may be taken:
(a) The Issuer or the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and
financial data of the Company, only, however, insofar as they
pertain to the Project; or
(b) The Issuer or the Trustee may pursue all remedies now
or hereafter existing at law or in equity to recover all amounts,
including all Loan Payments and Additional Payments and under
Section 4.8 hereof the purchase price of Bonds tendered for
purchase, then due and thereafter to become due under this
Agreement, or to enforce the performance and observance of any
other obligation or agreement of the Company under this Agreement.
Notwithstanding the foregoing, the Issuer shall not be obligated
to take any step which in its opinion will or might cause it to
expend time or money or otherwise incur liability unless and until
a satisfactory indemnity bond has been furnished to the Issuer at
no cost or expense to the Issuer. Any amounts collected as Loan
Payments or applicable to Loan Payments and any other amounts
which would be applicable to payment of Bond Service Charges
collected pursuant to action taken under this Section shall be
paid into the Bond Fund and applied in accordance with the
provisions of the Indenture or, if the outstanding Bonds have been
paid and discharged in accordance with the provisions of the
Indenture, shall be paid as provided in Section 5.07 of the
Indenture for transfers of remaining amounts in the Bond Fund.
The provisions of this Section are subject to the further
limitation that the rescission and annulment by the Trustee of its
declaration that all of the Bonds are immediately due and payable
also shall constitute a rescission and annulment of any
corresponding declaration made pursuant to this Section and a
rescission and annulment of the consequences of that declaration
and of the Event of Default with respect to which that declaration
has been made, provided that no such rescission and annulment
shall extend to or affect any subsequent or other default or
impair any right consequent thereon.
Section III.3. No Remedy Exclusive. No remedy conferred
upon or reserved to the Issuer or the Trustee by this Agreement 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, in equity or by
statute. No delay or omission to exercise any right or power
accruing upon any default shall impair that 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 or the Trustee
to exercise any remedy reserved to it in this Article, it shall
not be necessary to give any notice, other than any notice
required by law or for which express provision is made herein.
Section III.4. Agreement to Pay Attorneys' Fees and
Expenses. If an Event of Default should occur and the Issuer or
the Trustee should incur expenses, including attorneys' fees, in
connection with the enforcement of this Agreement or the
collection of sums due hereunder, the Company shall be required,
to the extent permitted by law, to reimburse the Issuer and the
Trustee, as applicable, for the expenses so incurred upon demand.
Section III.5. No Waiver. No failure by the Issuer or the
Trustee to insist upon the strict performance by the Company of
any provision hereof shall constitute a waiver of their right to
strict performance and no express waiver shall be deemed to apply
to any other existing or subsequent right to remedy the failure by
the Company to observe or comply with any provision hereof.
Section III.6. Notice of Default. The Company shall notify
the Trustee immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event
which, with the giving of notice or passage of time or both, would
become an Event of Default.
(End of Article VII)
ARTICLE IV
MISCELLANEOUS
Section IV.1. Term of Agreement. This Agreement shall be
and remain in full force and effect from the date of delivery of
the Bonds to the Original Purchaser until such time as (i) all of
the Bonds shall have been fully paid (or provision made for such
payment) and the Indenture has been released pursuant to Section
9.01 thereof and (ii) all other sums payable by the Company under
this Agreement shall have been paid.
Section IV.2. Amounts Remaining in Funds. Any amounts in
the Bond Fund remaining unclaimed by the Holders of Bonds for four
years after the due date thereof (whether at stated maturity, by
redemption, upon acceleration or otherwise), at the option of the
Company, shall be deemed to belong to and shall be paid, subject
to Section 5.06 of the Indenture, at the written request of the
Company, to the Company by the Trustee. With respect to that
principal of and any premium and interest on the Bonds to be paid
from moneys paid to the Company pursuant to the preceding
sentence, the Holders of the Bonds entitled to those moneys shall
look solely to the Company for the payment of those moneys.
Further, any amounts remaining in the Bond Fund and any other
special funds or accounts created under this Agreement or the
Indenture, except the Rebate Fund, after all of the Bonds shall be
deemed to have been paid and discharged under the provisions of
the Indenture and all other amounts required to be paid under this
Agreement and the Indenture have been paid, shall be paid to the
Company to the extent that those moneys are in excess of the
amounts necessary to effect the payment and discharge of the
Outstanding Bonds.
Section IV.3. Notices. All notices, certificates, requests
or other communications hereunder shall be in writing, except as
provided in Section 3.4 hereof, and shall be deemed to be
sufficiently given when mailed by registered or certified mail,
postage prepaid, and addressed to the appropriate Notice Address.
A duplicate copy of each notice, certificate, request or other
communication given hereunder to the Issuer, the Company, any
Credit Facility Issuer or the Trustee shall also be given to the
others. The Company, the Issuer, any Credit Facility Issuer and
the Trustee, by notice given hereunder, may designate any further
or different addresses to which subsequent notices, certificates,
requests or other communications shall be sent.
Section IV.4. Extent of Covenants of the Issuer; No Personal
Liability. All covenants, obligations and agreements of the
Issuer contained in this Agreement or the Indenture shall be
effective to the extent authorized and permitted by applicable
law. No such covenant, obligation or agreement shall be deemed to
be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer in other than his
official capacity, and neither the members of the Issuer nor any
official executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by
reason of the issuance thereof or by reason of the covenants,
obligations or agreements of the Issuer contained in this
Agreement or in the Indenture.
Section IV.5. Binding Effect. This Agreement shall inure to
the benefit of and shall be binding in accordance with its terms
upon the Issuer, the Company and their respective permitted
successors and assigns provided that this Agreement may not be
assigned by the Company (except as permitted under Sections 5.8 or
5.12 hereof) and may not be assigned by the Issuer except to (i)
the Trustee pursuant to the Indenture or as otherwise may be
necessary to enforce or secure payment of Bond Service Charges or
(ii) any successor public body to the Issuer.
Section IV.6. Amendments and Supplements. Except as
otherwise expressly provided in this Agreement or the Indenture,
subsequent to the issuance of the Bonds and prior to all
conditions provided for in the Indenture for release of the
Indenture having been met, this Agreement may not be effectively
amended, changed, modified, altered or terminated by the parties
hereto except with the consents required by, and in accordance
with, the provisions of Article XI of the Indenture, as
applicable.
Section IV.7. References to Credit Facility. During such
time or times as no Credit Facility is in effect, and during the
continuation of any event of default under the Indenture due to a
failure by the Credit Facility Issuer to honor a drawing by the
Trustee under the Credit Facility then in effect in accordance
with the terms thereof, references herein to the Credit Facility
Issuer shall be ineffective.
Section IV.8. Execution Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
regarded as an original and all of which shall constitute but one
and the same instrument.
Section IV.9. Severability. If any provision of this
Agreement, or any covenant, obligation or agreement contained
herein is determined by a judicial or administrative authority to
be invalid or unenforceable, that determination shall not affect
any other provision, covenant, obligation or agreement, each of
which shall be construed and enforced as if the invalid or
unenforceable portion were not contained herein. That invalidity
or unenforceability shall not affect any valid and enforceable
application thereof, and each such provision, covenant, obligation
or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent
permitted by law.
Section IV.10. Governing Law. This Agreement shall be
deemed to be a contract made under the laws of the State and for
all purposes shall be governed by and construed in accordance with
the laws of the State.
(End of Article VIII)
IN WITNESS WHEREOF, the Issuer and the Company have caused
this Agreement to be duly executed in their respective names, all
as of the date hereinbefore written.
CITY OF PRINCETON,
INDIANA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mayor
Attest:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Clerk-Treasurer
PSI ENERGY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Treasurer
Exhibit A
DESCRIPTION OF POLLUTION CONTROL FACILITIES
AT
▇▇▇▇▇▇ GENERATING STATION
FINANCED IN PART BY SERIES 1982 BONDS
The Company's undivided 50.05% ownership interest in:
1. Flue Gas Desulfurization and Sludge Fixation
System for Unit 5 Generating Station, consists of a
system designed to remove sulfur dioxide from the flue
gases emitted from Unit 5. The primary components of
the facility include four booster fans and motors, four
scrubber modules and mist eliminators, four scrubber
pumps, a slurry recycle system, two sludge thickener
tanks and four underflow pumps, one thickener overflow
tank and two overflow pumps, inlet ductwork, four inlet
and four outlet isolation dampers, a reactant
preparation system consisting of facilities for
limestone unloading and transport, lime unloading and
transport, a ball mill, a reactant preparation
building, a slurry mix tank, three slurry transfer
pumps and a dolomitic lime day bin, support steel,
foundations, piping, wiring, instrumentation and
controls, but excluding certain bypass gas ductwork,
outlet ductwork, air reheater and certain electrical
components which are not entirely dedicated to support
the FGD system. The sludge treatment system consists
of a system to treat the FGD sludge from Unit 5 in a
stabilization process. The primary components of the
stabilization facility include fly ash and FGD sludge
transport systems to the stabilization area, a sludge
surge tank, a fly ash surge silo, a lime silo, a sludge
holding pond, an external loading ▇▇▇▇▇▇, a fixation
process building, four vacuum filters, one pug mill,
material handling conveyors, pumps, an external radial
stacking conveyor, foundations, structural steel,
wiring, instrumentation and controls.
2. Electrostatic Precipitator for Unit 5
Generating Station, consists of a system to remove fly
ash from the gases emitted from Unit 5. The primary
components of the facility include two electrostatic
precipitators and hoppers, certain inlet and outlet
ductwork thereto and therefrom, certain pneumatic fly
ash transport piping and hydroveyor.
3. Off-Road Solid Waste Transport and Disposal
Equipment and Solid Waste Disposal Site Improvement,
consists of a road dedicated exclusively to travel to
and from an 86 acre landfill site, four 50 ton rear
dump trucks, one tractor shovel, three low ground
pressure tractors, and one soil vibrator-compactor.